African Development Center

The mission of the African Development Center of Minnesota (ADC) is to enable and empower families and individuals from diverse backgrounds to start and sustain businesses, build wealth, and reinvest in their communities. ADC works towards this mission by offering workshops and consultations for business training, technical assistance, and strategic planning, as well as offering small business loans. Additionally, ADC provides classes for potential first-time homebuyer families, and offers financial literacy education and tools. The initial and primary clients of ADC are the new American families arriving to Minnesota from Africa; however, ADC has never limited its services to any one sector of the population. In fact, for the last two years ADC has seen a steady increase in the attendance of the ‘European-Americans’ in first-time homebuyer trainings; now comprising roughly 50% of attendees.

The philosophy of the African Development Center is that no one, regardless of race, ethnicity, gender, sexual orientation, religion or nearly any other particular aspect of life, should be left out of the opportunity to create wealth and happiness for oneself or one’s family here in Minnesota or the United States of America. Further, ADC also unequivocally holds to the notion that without dedication and hard work, sustainable wealth is not possible for an individual or community. Lastly, in all of its work and trainings, ADC continuously stresses the importance of the private sector for the creation of jobs, wealth, and prosperity.

ADC believes that the United States of America is at its best when government is only relied upon to help create an environment within which the private sector and social entrepreneurs such as ADC can effectively create jobs, help families build wealth, educate the population, and make Minnesota and the nation strong and stable for all.

For the past three years, ADC has been recognized as the #1 small business lender in the city of Minneapolis. This work with small businesses has created and sustained hundreds of jobs over the years, and helped to revitalize a number of neighborhoods and communities.

Community development has always been at the forefront of the work ADC does. In 2009, ADC invested over $2 million in the purchase and rehabilitation of a vacant building in the West Bank area of Minneapolis, near the Carlson School of Management. This building has since been converted into the new Headquarters of ADC, home to a beautiful African and African-American art gallery, and location of a social venture partnership in the Afro Deli & Coffee, which is popularly and predominately frequented by the students of the University of Minnesota, Augsburg College and the surrounding community.

The African Development Center of Minnesota serves the Metro region of Minneapolis and St. Paul, as well as 7 cities of Greater Minnesota. ADC has 9 employees with its main office in Minneapolis, and two satellite offices: one in Mankato, Minnesota and one in Rochester, Minnesota.

Because of the diversity of clients that ADC serves, the work towards its mission and philosophy must always take the wide variety of needs and desires into account, and try to meet them in any way it can. ADC prides itself in this respect: as a culturally-competent economic development organization, that has worked hard to create effective products, services, and lasting private-public relationships to better serve the growing new American communities in Minnesota.

The Story of the New Markets Mortgage Program (NMMP)

ADC recognizes and understands the current controversy around references to Shariah here in Minnesota and the United States. ADC wants to make it clear that it has not and it will not advocate for the implementation of Shariah law here in this state or nation. However, because of the strength of its mission and philosophy, ADC will always look for ways to serve the financial needs of its diverse clientele, within the constitutional boundaries and financial regulations of Minnesota and the U.S. Therefore, ADC partners with the private sector financial institutions and our government in order to deliver high quality products at affordable rates for all populations, but especially those underserved by most financial entities.

NMMP has been private-public partnership between ADC, Devon Bank of Chicago, and Minnesota Housing. This was a pilot project with the intention to serve a segment of the community not willing to access conventional mortgages based on restrictions of their faith. While ADC strongly encourages conventional financing based on its greater availability, and down payment and closing cost assistance, it recognizes that there is still a significant segment of this community that will make the choice to only use NMMP, despite the higher costs overall and lack of financial assistance.

Islamic financing has been available in United Stated for the people who can afford it for quite a while. In fact, there are over a dozen mortgage products in the marketplace offering similar products and much more sophisticated vehicles of investment. Just a quick online search returns a plethora of Islamic financing products available within the United States.

The underlying legal document of the NMMP actually came from Fannie Mae via Devon Bank. All of these documents do and must comply with local and national United States mortgage laws. Additionally, Freddie Mac has been buying Islamic mortgages since early 2005. Further, the Harvard Islamic Financing Project has been around for over a decade, educating and assisting other institutions, such as the U.S. Treasury in offering its Islamic Finance 101 seminar.

How does the NMMP work?

ADC trained first-time home buyer families and counseled them until they were credit and income ready to qualify for the NMMP. It forwarded the application to the Devon Bank, which was underwriting the NMMP. Including the necessary training, counseling, and assisting in completing the application, ADC felt the brunt of the majority of expenses for providing this product. NMMP clients were predominately new Americas with low to moderate income who needed extra help from ADC in order to qualify and be mortgage ready. Minnesota Housing only came into play if and when a mortgage was funded and booked by the Devon Bank. Thus, the actual risk and cost to Minnesota Housing was very limited.

Why NMMP stalled

Contrary to what is largely being written now, there has been and still is significant demand for this type of product, despite that only 3 clients were successfully financed through NMMP. The pipeline and the potential clients who were interested and waiting when it was decided to phase out the product were more 20 families. Yet, here are a number of reasons why this project was tabled in favor of other efforts and services provided by ADC:

1- It takes a long period of time to make a new American and low to moderate Minnesotans credit and mortgage ready. ADC strives to offer sustainable home-ownership. Therefore, it takes a little bit more time and care to ensure the financial sustainability of the potential homeowner.

2- Devon Bank is not a local financial institution in Minnesota and the communications between ADC and Devon Bank needed to be more efficient and frequent in order to answer clients’ questions in a timely manner. This was a pilot program and all were learning from each other. Devon Bank does not serve low and moderate income families, so they had a steep learning curve to climb with ADC in order to understand the needs of these families.

3- When Minnesota Public Radio featured the story of the first family to access NMMP on March 1, 2009 a mistake was made in the reporting attributing the Minnesota Housing being the provider of the mortgage. This has created tension in the community with some members campaigning against the product, because they incorrectly believed the state was offering the mortgage.

4- During the NMMP pilot project, the American home mortgage industry started to go through a financial meltdown, making the majority of mortgage products undesirable.

The Minnesota Housing Finance Agency

ADC is extremely grateful to the Minnesota Housing for their leadership in understanding the diverse needs of Minnesotans, and is grateful for their willingness to ignite the power of the private sector and purchase NMMP mortgages after they have been vetted by ADC and approved, booked, and closed by Devon Bank. The professionals of the Minnesota Housing make ADC proud for what they do for all of the people in the state of Minnesota.

Governor Tim Pawlenty

The African Development Center of Minnesota is grateful for the service and sacrifices that Tim Pawlenty and his family made for the eight years of public service as Minnesota’s Governor, and wishes to offer former Governor Tim Pawlenty all the best in his endeavor of becoming the next President of the United States.

Many of ADC clients can relate to his story. Within the ADC lending portfolio are many young men who are truckers and raise their families the way his father, Eugene, raised his family. He can also relate to ADC clients because his grandparents immigrated here from Germany and Russia. ADC clients are hard working Americans who want the best for their children and dream of the day when they may also serve the public as a state governor, or even President of the United States.

ADC had no idea that the NMMP was ordered to be shut down by Governor Pawlenty because ADC never worked directly with his office, as this product was a private –public partnership assisted by Minnesota Housing. Regrettably, ADC was not invited or included in any discussions or decisions by the former Governor or his administration regarding the direction given to Minnesota Housing to halt this product.

The African Development Center of Minnesota strongly believes the United States of America is an exceptional country and is a beacon of hope for many throughout the globe. She can only shine and maintain her status as an economic powerhouse when she is tolerant, accepting, and uniting of her diverse constituency. ADC also believes that vast majority of Muslims in America want to see an inclusive and stronger America, and the only way to ensure this is by not demonizing all of Islam, including those who practice it here in the U.S. Islamic extremism will truly be defeated when the majority of American Muslims are genuinely proud of their country and able to fully participate in the economic and civic life of the United States of America. While it is necessary to work collectively to prevent those who want to harm this country and its way of life, it needs to be done in a way that maintains respect and the celebration in the differences and diversity of this great nation.

__________

Thank you for your time and interest in the products and services provided by ADC, and I invite you to explore our website further to learn more about this organization, its success stories, and driving purpose to create sustainable, vibrant, and engaged communities throughout the state of Minnesota.

If you have any questions or comments, please feel free to contact me, Hussein Samatar – Founder and Executive Director of the African Development Center.

Sincerely,

tel: 612-333-4772 ×107
email: hsamatar@adcminnesota.org