Indianapolis’ communities of color hit hard by the foreclosure crisis may soon be able to benefit from $755,000 in relief as part of a $53 million settlement by Fannie Mae, the federal mortgage association, announced Monday.
The Fair Housing Center of Central Indiana, along with the National Fair Housing Alliance and 19 other local fair housing organizations throughout the country, reached a landmark agreement with Fannie Mae to resolve a housing racial discrimination case filed in 2015 and 2016 alleging that Fannie Mae treated foreclosed homes in communities of color unfavorably.
“Far too many of Indianapolis’ Black neighborhoods are still suffering from the foreclosure crisis and the subsequent loss of owner-occupied housing units,” said Amy Nelson, executive director of the Fair Housing Center of Central Indiana, in a press release.
“These funds will provide a needed boost to rehab vacant homes in need, assist in homeowner repair projects, and support grassroots organizations in our hardest hit neighborhoods of color to stop any further deterioration and loss of housing stock.”
Complaint: Fannie Mae exacerbated damage of mortgage crisis
Fannie Mae was accused in the 2016 complaint of purposely failing to maintain its foreclosed properties in middle- and working-class Black and Latino neighborhoods to the same quality it does for foreclosures it owns in comparable white neighborhoods.
The complaint was the result of a four-year long investigation of more than 2,300 Fannie Mae-owned properties across 39 metropolitan areas, including 78 homes in Indianapolis. It revealed a systemic trend of homes in Black neighborhoods suffering from neglect including damaged structures, overgrown shrubbery, broken windows, obstructed gutters, while homes in comparable White neighborhoods were well-maintained.
The plaintiffs alleged the neglect by Fannie Mae was deliberate.
Through differential treatment, the complaint alleged that Fannie Mae exacerbated damage caused by the 2008 mortgage crisis and foreclosure crisis in communities of color.
Subsequent urban blight tanked home values for predominantly Black and Latino residents who lived in neglected neighborhoods, the complaint alleged.
Indianapolis will get $1M of the $53 settlement
Thanks to today’s settlement, Indianapolis, through the Fair Housing Center of Central Indiana, will receive about $1 million, $755,000 of which will go to community relief. The rest will cover the Fair Housing Center’s litigation and investigation expenses of the case, as well as future fair housing programs.
Nelson said that the Fair Housing Center’s Board of Directors will ultimately decide what type of grants they give but she anticipated they will likely designate their funds to nonprofits working in Indianapolis’ neighborhoods of color with a focus on homeowner repair and housing renovation.
She added that this will help to counteract displacement and help to address the staggering loss of owner-occupied units, a trend detailed in the center’s recent fair housing report on declining Black homeownership, and other neighborhood stabilization housing efforts.
Contact IndyStar reporter Ko Lyn Cheang at firstname.lastname@example.org or 317-903-7071. Follow her on Twitter: @kolyn_cheang.