HUD BOOSTS HOMEOWNERSHIP
WITH FAST LOAN PROCESSING
AND $10 MILLION IN GRANTS
PHILADELPHIA -- The Clinton Administration is dramatically
speeding up processing of home mortgage insurance and is awarding
$10.1 million in counseling grants to increase homeownership,
Housing Secretary Henry Cisneros announced today.
The quick action on Federal Housing Administration mortgage
insurance will cut loan processing costs for the Department of
Housing and Urban Development and for mortgage lenders,
eventually leading to reductions in closing costs for homebuyers,
Cisneros said. FHA efficiency moves and programmatic reforms
since 1993 have already cut the average homebuyer's closing costs
for an FHA-insured mortgage by about $1,000.
The HUD grants expanding mortgage counseling programs will
benefit an estimated 107,000 individuals and families. Counseling
will make people aware of homeownership opportunities and give
them the knowledge to choose the best available financing and
avoid borrowing beyond their means, Cisneros said.
"President Clinton has asked us to boost homeownership to
record levels, and the steps we're announcing today will bring us
closer to reaching that goal," Cisneros said. "We're doing our
work better, faster, more efficiently and at less cost to
taxpayers, as we successfully reinvent government."
"Our efforts have already helped increase the number of
American homeowners by 4.4 million families since 1993 to a
record high of 66.1 million," Cisneros said. "The percentage of
Americans owning homes -- 65.4 percent -- is at its highest level
in over 15 years and near a record high."
Cisneros announced the new HUD actions in Philadelphia, at
the opening of a new HUD Regional Homeownership Center. The
center -- and another center that opened today in Atlanta -- will
use the latest technology to cut average processing time for an
FHA mortgage insurance certificate from the current time of four
to six weeks to just two days.
Within a year, the new Homeownership Centers -- along with a
similar center that opened in Denver in August of 1994 -- will
process about 60 percent of the 500,000 to 750,000 FHA mortgage
insurance certificates filed each year around the nation.
Two more regional centers are planned by the end of the
decade, allowing a typical FHA mortgage insurance certificate
anywhere in the United States to be processed in just two days.
HUD Assistant Secretary Nicolas P. Retsinas, who heads the
FHA, said the lessons learned in Denver can be applied in other
regions to improve the FHA nationwide.
"The FHA is becoming more responsive to the needs of
homebuyers," Retsinas said. "The Homeownership Centers will
enable us to provide better and quicker service at lower cost."
The Philadelphia Homeownership Center will begin its
operations by serving the southern New Jersey and eastern
Pennsylvania areas. Over the next year, the Philadelphia Center
will add all the states from Maine to Virginia.
The Atlanta Homeownership Center will initially serve Georgia
and the Orlando, FL area. It will add the rest of Florida, South
Carolina, North Carolina, Tennessee, Kentucky, Mississippi and
Alabama over the next year.
Cisneros also announced a new Homebuyer Education Program to
inform first-time buyers on the essentials of locating,
negotiating, buying, financing, owning and maintaining a home.
First-time homebuyers who complete the program will be eligible
for a reduction in their FHA mortgage insurance premium by about
$200. A new Marketing and Outreach Division is promoting the
HUD's outreach efforts are targeting first-time, minority,
women, multi-cultural and immigrant homebuyers.
Cisneros said the $10.1 million in new counseling grants
will enable non-profit groups to offer counseling to first-time
homebuyers and to homeowners and renters who have financial
problems or other housing-related difficulties.
Four HUD-approved national organizations will receive a
total of $3.5 million in the grants: Acorn Housing Corporation;
the National Association of Housing Partnerships, Inc.; the
Neighborhood Reinvestment Corporation, and Catholic Charities
Additional grants totalling $6.5 million will go to 184 HUD-
approved local housing counseling agencies, which are non-profit
and local government groups.
Both initiatives announced by Cisneros today are designed to
help achieve President Clinton's goal of 8 million new homeowners
by the year 2000. The National Partners in Homeownership, an
alliance of 58 housing industry, non-profit and government
groups, are working to make homebuying easier and less expensive.
One of the Partners' goals is to make housing counseling
A list of the organizations receiving housing counseling
grants is available.
Content Archived: January 20, 2009