What I Learned Buying My First Home as a Black Woman at 26

Design Elements: Getty | Sezeryadigar; Feverpitched; Sinenkiy
Photo Illustration: Aly Lim
Design Elements: Getty | Sezeryadigar; Feverpitched; Sinenkiy
Photo Illustration: Aly Lim

Ever since I could remember, I wanted to own a home. Growing up, I dreamed about being able to decorate the rooms and paint my bedroom walls whatever color I wanted. In college, I developed an interest in personal finance and began to learn how homeownership can be a tool for wealth building and something to pass on to your children.

At the age of 26, I was excited to become a first-time homebuyer with my husband in the Midwest. My husband was working as a dispatcher for a transportation company, and I had been self-employed for a while as a freelance writer and had two years of tax returns showing my income. We paid off both our car loans and my student loans, which allowed extra cash flow to start saving for our dream.

"Growing up, I saw firsthand the economic and systemic challenges that many Black families face."

Black families have long been at a disadvantage and faced discrimination when it comes to the housing market, so I knew it was important to be aware of the circumstances going into the process. And in sharing what my experience was like buying a home in my mid-20s, I hope other Black women can learn what they should be aware of going into it, too.

I Was Realistic About Economic and Systemic Challenges

Growing up, I saw firsthand the economic and systemic challenges that many Black families face. Both of my parents grew up in inner-city Chicago in single-parent homes. My dad was one of six kids and grew up in a very poor housing project.

We lived both in Chicago and its surrounding suburbs during my childhood, and I saw how certain opportunities and access to homeownership varied even then. In 1968, the Fair Housing Act increased Black homeownership to 41 percent by 1970; but in 2020, the rate was only 43.4 percent. This is a shockingly small increase throughout 50 years. While the consistent racial wage and wealth gap and reported biases within the real estate industry are contributing factors to these figures, everyone has their own personal barriers to homeownership as well.

Mine were mostly economic challenges, as well as a lack of support and resources. As we started on our homeownership journey, my husband and I still were not completely debt-free, and we had no financial help from family to contribute to a down payment or make home repairs. At the time, we still had some credit card debt and my husband's student loans, which were around $14,000 at the time.

Initially, I also did not know many people who owned a home, nor which resources were available to us. As a result, we made a few costly mistakes. Despite these barriers and challenges, it's still very possible for anyone to own a home. Here's what helped tremendously in my own experience.

I Sought Education in Homeownership

If you're a first-time homebuyer or the first to own a home in your family, homeownership education is so crucial. I saw that a mortgage lender was offering a class at my local park district and signed up to attend. I learned so much during this hour-long class about the process and what I needed to do to take the first step.

"Homeownership education is so crucial."

Then, my husband and I started looking at homes online and determining what we could afford. We even went to some open houses just to practice assessing a home, and that's how we met our realtor.

While we learned a lot about buying a home, one mistake we made was not evaluating properties closely enough and negotiating on issues found on the home inspection. Looking back, I think we were just so excited to buy that we underestimated some of the required repairs, such as waterproofing the crawl space, costly tree removal, and buying new appliances; now, we wish we requested a credit for those things.

I Worked on My Credit and Other Requirements

Long before I decided to buy a home, I began working on my credit and paying down debt. I met my husband in college and encouraged him to work on his credit, too. Initially, he didn't have any credit cards or utility bills in his name. Now, we both have 800+ credit scores.

When buying a home with another person or a co-borrower, the lender will consider both people's credit scores and even focus on the lower score of the two. I didn't want there to be a "weaker link" between the two of us, so we both focused on keeping our credit card balances low and paying off debt.

In 2014, I graduated with about $20,000 in student loans, and I was able to pay that off before getting preapproved to buy our home, which helped a lot. Lenders also look at debt-to-income ratio, which is the total debt payments you have compared to your income, to determine if you can afford to take on another debt like a house payment.

I Explored Loan Options and Assistance Programs

At the homeownership class, I learned about different types of loans and was set on either an FHA or conventional loan. We ended up going with a conventional mortgage, but I also asked my lender about down payment assistance programs in our state. We had some money for a down payment, but I also wanted to save funds for closing costs, initial home repair, and maintenance.

Luckily, we qualified for an assistance program that worked just like a grant, so long as we stayed in our home for at least five years. Each month (leading up to the five-year mark), a portion of our down payment assistance grant would be forgiven.

One thing that surprised us was that our down payment assistance program required an interest rate increase on our mortgage. Rates were around 3.5 percent at the time, but we had to agree to a 5.5 percent interest rate. While I wasn't happy about the rate increasing the cost of our loan, we figured it was worth the tradeoff to receive assistance for a down payment at the time. Plus, we knew we wouldn't be in the home for the next 30 years and could always refinance after five years, if and when rates dropped.

I Budgeted and Got Organized Financially

Buying a home can be stressful because even once you're preapproved, the lender will continually ask to see check stubs and bank statements. I needed to provide two years of tax returns because I'm self-employed.

"We also paid close attention to where our money was going."

We also paid close attention to where our money was going in general by having weekly budget meetings. We sat down, usually on Fridays, to discuss upcoming bills and expenses for the week and to track debt payoff and savings. This helped us stay organized and reconcile transactions in our accounts whenever we had to provide a financial update to the lender.

It was also great for accountability and to get into the habit of prioritizing our goals while avoiding wasteful spending like subscriptions we weren't using. I used to pay $125 per month for kickboxing classes and also had a shoe and purse subscription that was around $40 per month. My husband and I committed to making our own lunch to bring to work each day, and we didn't exchange gifts with family for the holidays that year to save more.

I also tried to take on extra work to make more money, and my husband drove for Uber during his spare time. We were intentional about saving all the net income we made from side hustles instead of spending it.

Another thing that truly helped me buy a home at 26 was lowering my expectations. I knew we wanted a starter home that maybe didn't check all our boxes. We found a three-bedroom, 1.5-bath ranch-style home that ended up being perfect for our family of three. We didn't get the two-car garage or basement we wanted, but we could also afford the monthly payment and still have money left over to save so we wouldn't become house poor. We enjoyed four years in that home before selling it. Even in that short time, the value of our home increased by around 35 percent.

My Best Advice For Other Black Women Looking to Buy a Home

My advice for Black women or anyone looking to buy their first home would be to get into position — this includes financially and mentally. Seek out education on homeownership or a mentor who has been there before. When it comes to your finances, get on a budget and pay down your debt as soon as you can.

"Don't let a fear of discrimination stop you from trying to buy a home."

Do your research when it comes to agents and lenders. Don't let a fear of discrimination stop you from trying to buy a home, but if you feel you have experienced unfair biases and treatment due to your race, national origin, gender, or religion, you can file a complaint to report housing discrimination with the US Department of Housing and Urban Development. This will open an investigation, and you can receive assistance pursuing fair treatment or even taking legal action.

Most of the people we worked with during our homebuying process were amazing and so knowledgeable, but I know this isn't the case for everyone, so I'm grateful these resources exist. The whole process is well worth it if your dream is not only homeownership but pursuing a comfortable lifestyle you can afford.