HUD ASSISTANT SECRETARY LIU MARKS NATIONAL HOMEOWNERSHIP MONTH WITH TURNKEY CEREMONY IN ELE`ELE

ELE`ELE, KAUAI - On his first day of a two-day trip to Hawaii to commemorate National Homeownership Month, Housing and Urban Development Assistant Secretary Michael Liu today joined Kauai Mayor Bryan Baptiste in helping
to make a dream come true for an Ele`ele family by presenting them with keys to a home of their own.

After years of hard work and sacrifices, the Tony Coronel family achieved the American Dream of homeownership.
The home that the Coronel family had occupied since March of this year on a rent to own program offered by the County of Kauai is now their own. The purchase of the home was made possible through the HUD Section 8 Housing Choice Voucher Program. After years of using the HUD Section 8 assistance to pay rent, they are now using the assistance to make mortgage payments. The Kauai Housing Agency adopted HUD rules in Fall 2002 that allowed the Section 8 rental assistance to be used for mortgage payments.

"The Bush Administration and Secretary Mel Martinez are committed to helping families like the Coronels become homeowners," Liu said. "Homeownership strengthens families, strengthens communities, and is critical to the
nation's economic health. The Coronels's story is a remarkable one that should be an inspiration to others wanting
to become homeowners."

For years Tony and Catherine Coronel have dreamed of becoming homeowners. Like many families, they wanted a place to live and raise their families without the worries of rent increases and landlords not renewing leases. They wanted a home to eventually pass on to their children. Until Mr. Coronel began receiving Section 8 assistance and volunteered to enroll in the Section 8 Family Self Sufficiency (FSS) program administered by the County of Kauai Housing Agency, homeownership seemed beyond reach.

Under the HUD Section 8 program, eligible families receive assistance in paying their rent. Section 8 families are
eligible to volunteer to participate in the FSS program. Through the FSS program, the family signs a five-year FSS contract with the housing agency agreeing to be off of welfare and employed by the end of the five years. The housing agency works with the family to arrange for program services such as child care, transportation, education, job training and employment counseling, substance/alcohol abuse treatment or counseling, household skill training,
and homeownership counseling. The housing agency also establishes an interest-bearing escrow account for the family to encourage savings. As the family's earned income increases, the amount the family pays for rent also increases and the amount of HUD assistance decreases. Under the FSS program, a portion of the savings to HUD is credited to the family's escrow account. If the family completes the FSS program successfully, the escrow amount
is released to the family and may be used for any purpose.

The Coronels were enrolled in the Kauai Housing Agency's homebuyer education program that included an
opportunity for FSS participants to join the Federal Home Loan Bank of Seattle's Home$tart Plus program. Under Home$tart Plus, FSS participants are eligible to receive a two to one match for funds saved in the escrow account
up to $10,000. The Coronels were able to earn the full matching grant.

When the County of Kauai acquired a property in Ele`ele through the buy-back clause in its affordable housing program, the Coronels were offered the opportunity to rent the home in March 2003 under the County's rent to own program. The home was offered for sale for $206,000. By April 2003, the Coronels had accumulated over $22,000 in escrow through the FSS program and earned the $10,000 from the Home$tart Plus program. With a mortgage loan from Bank of Hawaii, the participating lender with the Federal Home Loan Bank and administrator of the Home$tart
Plus program, and the application of the Section 8 assistance towards homeownership, the pieces in the puzzle had come together for the Coronels to buy the home.

Mayor Baptiste said, "I am very happy that the first Section 8 family to purchase a home in the State of Hawaii was able to do so on Kauai and with the assistance of the staff at the Kauai Housing Agency. In four short years, the Coronels went from being on welfare to owning their home. We look forward to many more Section 8 families
achieving the same dream." Fifty families are enrolled in the County's FSS program.

The Bush Administration is actively working to increase affordable housing through programs that include:

• The American Dream Downpayment Fund. This program would provide $200 million to continue to help an
  estimated 40,000 low-income families reach the dream of homeownership.
• Housing Counseling Assistance Program. The President's spending plan includes an additional $5 million to
  provide counseling services to 250,000 lower-income Americans who wish to become homeowners or who
  seek affordable rental housing.
• Housing Choice Voucher Homeownership. HUD allows local housing agencies the flexibility to use rental
  assistance vouchers toward moving low-income families into homeownership. The housing agencies may
  either provide mortgage assistance in lieu of a rental subsidy or offer families a one-time downpayment
  grant equaling up to one-year's worth of their rental assistance.
• Single-Family Affordable Tax Credit. To stimulate the production of affordable homes in distressed
  communities where such housing is scarce, the Administration is proposing a tax credit of up to 50 percent
  of the cost of new construction or rehabilitation. This tax credit targets low-income households earning
  less than 80 percent of an area's median income.
• Self-Help Homeownership Opportunity Program (SHOP). President Bush is proposing $65 million to fund
  so-called sweat equity homeownership programs. This proposal would provide grants to support nonprofit organizations like Habitat for Humanity, which requires low-income families to help construct the homes
  they will eventually own.
• Home Investment Partnerships Program (HOME). The budget includes $2.1 billion, a $113 million increase
  for the HOME program to help more than 600 state and local communities finance the costs of land
  acquisition, new construction, rehabilitation and down payment assistance.
• Office of Regulatory Reform. In an effort to break down regulatory barriers that impede the production
  of affordable housing, HUD will create a new Office of Regulatory Reform which will commit an additional
  $2 million next year on research efforts to learn more about the nature and extent of these regulatory
  obstacles. Through this office, researchers will develop the tools needed to measure and ultimately reduce
  the effects of excessive barriers that restrict the development of affordable housing at the local level.

Tomorrow, on the final day of his trip to Hawaii, Liu will be in Honolulu to announce new funding for a program that
he announced last year to help meet the housing needs of Native Hawaiians.

More information about Kauai's Section 8 program can be obtained by calling (808) 241-6451. More information on
HUD and its programs is available on the Internet.

###