Housing and Urban Development Secretary Andrew Cuomo today challenged all segments of the housing industry to work with HUD to raise the national homeownership rate among African Americans and Hispanics to a historic high of more than 50 percent in three years.

"Today I’m setting a goal of homeownership for a majority of minority households in three years," Cuomo said. "I believe we can and we must reach this historic goal, because the dream of homeownership isn’t reserved for white families – it’s an American Dream and it’s open to every family in our country. Our long-term goal is to do even more, and eliminate the homeownership gap that divides whites from minorities."

To help achieve the short-term goal, Cuomo committed the Federal Housing Administration, which is part of HUD, to insure mortgages for more than 765,000 African American and Hispanic families over the next three years. Other parts of the housing industry would help create the remaining new minority homeowners to achieve the goal of homeownership for a majority of minorities.

HUD will also ask a broad range of groups – including the National Association of Realtors, the National Association of Mortgage Brokers, the Mortgage Bankers Association of America, Fannie Mae and Freddie Mac – to work together to help increase minority homeownership, Cuomo said.

Today, an estimated 423,000 additional African American families and about 420,000 additional Hispanic families would have to become homeowners to achieve the goal of homeownership for a majority of these minorities. The number could rise over the years as the population grows and as some households move out of homeownership.

-Federal Housing Commissioner/HUD Assistant Secretary for Housing William Apgar announced the new commitment on behalf of Cuomo today at a meeting of the U.S. Conference of Mayors in Seattle, WA.

In the first quarter of this year, 73.4 percent of white households across the nation owned their homes – but only 47.8 percent of African American households and 45.7 percent of Hispanic households were homeowners.

A total of 70.7 million American families owned their homes in the first quarter of the year – more than at any time in American history. In all, 8.9 million more families owned homes in the first quarter of 2000 than when President Clinton took office in 1993. The homeownership rate stood at 64 percent in early 1993 – 3.1 percent below the first quarter rate of 2000.

Even though the black homeownership rate is already at a record high and other minority homeownership rates are near a record, the gap in the white and minority homeownership rates is still far too large, Cuomo said.

Cuomo said the number of black and Hispanic homeowners has increased by nearly 3.5 million in the past seven years. During this same time period, FHA helped more than 1.5 million of these minority families buy a new home.

"We have completed our reforms of the way FHA does business, and we now have more capacity to serve minority households than ever," Cuomo said.

In the past seven years, FHA has increasingly focused on serving minority borrowers. The percentage of FHA-insured mortgages going to minority families has jumped from 22 percent in 1993 to 38 percent in 1999. This rate of funding minority home mortgages far exceeds the private conventional market, which provided 16 percent of its home mortgages to minorities in 1998.

Because of the continued strong growth rate among minority homeowners, a total of 40 percent of the net new homeowners since 1994 are minorities – even though minorities account for just 23 percent of the population.

Studies have shown that homeowners accumulate wealth as the investment in their homes grows, enjoy better living conditions, are often more involved in their communities, and have children who tend on average to do better in school and are less likely to become involved with crime. Communities benefit from real estate taxes homeowners pay, and from stable neighborhoods homeowners create.