"Opening the doors to homeownership to more and more Americans is one of this Administration's goals," said Secretary Martinez. "The American Dream Downpayment fund will accomplish much more than that. By giving as many Americans as possible an opportunity to become stakeholders in their community, we believe it will help to stabilize some neighborhoods and completely revitalize others."

The flexible program will enable local communities to help provide low-income families with interest rate reductions, closing cost and downpayment assistance.

The American Dream Downpayment Program will become part of HUD's HOME Investment Partnerships Program (HOME), an existing program that helps communities nation-wide to expand the supply of standard, affordable housing for low and very low income families by providing grants to states, local governments.

Since its inception in 1992, the flexible HOME Program has played an integral role in addressing the shortages of affordable rental housing and homeownership in communities nationwide. Participating jurisdictions are encouraged to partner and leverage resources with non-profits, developers, private lenders and contractors. The partnerships have resulted in an estimated 613,460 units being constructed, rehabilitated, or acquired and 73,700 families have received rental assistance.

The President also proposed a new FHA hybrid adjustable rate mortgage that will also greatly enhance the opportunities for low and moderate-income families looking to purchase their first home. That program is expected to generate 40,000 new mortgages in 2002 and it will help more families in 2003.

Read a brief fact sheet about the American Dream Downpayment Fund.