HUD Archives: News Releases

HUD UNVEILS PLAN FOR 25,000 PUBLIC HOUSING FAMILIES TO BECOME HOMEOWNERS;
WASHINGTON, D.C. EFFORT A MODEL FOR NATIONAL ACTION

WASHINGTON, DC -- Twenty-five thousand American families living in public housing will become homeowners by the year 2000 under a new initiative announced today by Housing and Urban Development (HUD) Secretary Henry G. Cisneros.

This initiative is HUD's first comprehensive homeownership plan for public housing families, Cisneros said. The plan expands on earlier, more limited efforts that were focused on the sale of public housing units to residents.

The new HUD initiative has several elements: sale of single- family homes and townhomes and garden apartments already in the public housing inventory; sale of homes developed or acquired by housing authorities for homeownership as part of national efforts to replace demolished high rise projects; and enabling qualified families to buy homes from the private sector and graduate from public housing.

Since 1993, the Department has approved the sale by public housing authorities of almost 4,700 units for homeownership -- 40 percent more than in the previous four years. By creating locally- designed homeownership programs, HUD's new initiative will accelerate that pace.

"For thousands of families in public housing who have been struggling to work their way up and out of public housing, the opportunity to own their own home can change their lives forever, " Cisneros said. "This plan builds on our efforts to dramatically transform public housing and to help raise the number of homeowners under the President's National Homeownership Strategy."

HUD's public housing homeownership initiative will make it possible for qualified families living in public housing -- those who are working or participating in job training and education that will lead to work -- to reap the benefits that homeownership provides.

In announcing the new national initiative, Cisneros also committed the Department to work with Washington, D.C.'s housing authority to create 2,500 homeownership opportunities for public housing families by the year 2000.

Today Cisneros joined community groups, Fannie Mae, the Local Initiatives Support Corporation (LISC), and District of Columbia Housing Authority Receiver David Gilmore to announce an agreement for the sale and rehabilitation of more than 50 vacant single- family homes in the District's Columbia Heights and Shaw neighborhoods to provide homeownership for public housing families.

HUD officials also touted the public housing homeownership initiative by celebrating with new homebuying families in High Point, NC, Grand Rapids, MI, Milwaukee and New Orleans.

"In Washington, we will be restoring vacant houses which are an eyesore and providing opportunities for many families living in D.C. public housing to become homeowning, contributing members of their communities," Cisneros said.

HUD will implement the initiative by taking the following actions:

• Making grants for employment and homeownership activities eligible for funding under the Economic Development and Supportive Services grant program.

  HUD will make grants to public housing authorities which partner with local non-profit groups, resident organizations, financial institutions, community development organizations and city agencies.

  Eligible for these grants will be programs for job training; employment counseling and enhancement; entrepreneurship training; and pre- and post-sale homeownership counseling and training services.

• Investing $500,000 for expanded technical assistance to public housing authorities and others seeking to implement HUD's homeownership initiatives.
• Engaging the Federal Housing Administration (FHA) and Ginnie Mae (Government National Mortgage Association) in support of this homeownership initiative.

  By utilizing FHA mortgage insurance for loans, private lenders will be able to use more flexible underwriting practices and require lower downpayments for homes purchased by public housing families.

  In addition, more affordable financing for home purchase and renovation can be made available through FHA's 203 (k) mortgage insurance program.

  As part of the initiative, Ginnie Mae and the FHA are also educating private lenders and Ginnie Mae securities issuers about opportunities to finance local public housing homeownership programs.

• Working with Fannie Mae and Freddie Mac (Federal Home Loan Mortgage Corporation) to provide secondary mortgage market financing for public housing homeownership initiatives.

  Fannie Mae and Freddie Mac are committed to purchasing loans made to low-income homebuyers. HUD will work with the two government-sponsored enterprises to insure that, through this commitment, the goals of the public housing homeownership initiative are served.

• Working with Congress to change existing law to expand public housing homeownership.

  HUD expects current public housing reform legislation to include provisions allowing non-profit groups to help with public housing sales programs. The legislation should also allow for the creation of a workable lease-purchase (rent-to-own) homeownership program and a time-limited Section 8 post-sale subsidy for low-income families buying existing public housing units.