HUD ANNOUNCES DOWNPAYMENT ASSISTANCE PLAN DURING NATIONAL HOMEOWNERSHIP WEEK

WASHINGTON - Nearly two million low-income families may soon have an opportunity to move into their own home thanks to a new downpayment assistance plan proposed by Housing and Urban Development Secretary Mel Martinez.

Martinez made the announcement during National Homeownership Week and a day after he and President Bush helped to construct a Habitat for Humanity home for a Hispanic family in Tampa.

The new downpayment assistance plan is part of HUD's Section 8 Housing Choice Voucher Program that assists 1.9 million low-income households to afford rental housing in the private market. The plan would permit local housing officials to provide families with up to one-year's worth of housing vouchers to be used toward the downpayment on a home.

"The downpayment is often the single largest obstacle to homeownership," said Martinez. "Today we're offering a step up to families who want to move beyond a lifetime of renting and toward owning a stake in their own neighborhoods."

Current HUD regulations allow local housing agencies to use vouchers to defray a family's monthly mortgage expenses but do not provide downpayment assistance. Under today's proposed plan, eligible homebuyers would have the choice of a one-time downpayment grant or monthly mortgage assistance.

Minority homeownership continues to lag significantly behind the near-historic national average. While more than two-thirds of Americans own their own home, fewer than half of African-American and Hispanic families are homeowners. Today's announcement will help voucher-holders who may have sufficient income to meet monthly mortgage expenses but are struggling to accumulate the up-front costs associated with buying a home.

"For too many families, this American Dream is out of reach," said Martinez. "We are fully committed to making the dream a reality."