HUD No. 04-152
December 22, 2004
HUD SECRETARY ISSUES INNOVATIVE NEW YEAR'S MESSAGE
Encourages families to make homeownership their New Year's resolution
WASHINGTON - Housing and Urban Development Secretary Alphonso Jackson issued a New Year's message today, encouraging families across America to make homeownership this year's resolution. The statement describes how easy and beneficial homeownership can be.
"If you don't already own a home, I'd like to suggest that becoming a homeowner in 2005 be among your New Year's resolutions," said Jackson. "As long as you have a steady salary, good credit, and few long-term debts, purchasing a home is probably within your reach. And by taking things one step at a time, you'll find that buying a home can be a very manageable process."
HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and espanol.hud.gov.
THIS NEW YEAR'S RESOLUTION: BUY A HOME!
By Secretary Alphonso Jackson
As 2005 approaches, many of us will seize the opportunity to evaluate our lives and embark upon new beginnings by making a New Year's resolution. Whether we're pledging to lose weight, use our credit cards more wisely, or spend more time with our families, our resolutions - if carried out - can have significant and life-altering results.
One of the keys to improving an individual's quality of life is to build wealth - and doing so is far easier than one might suspect.
Theodore R. Johnson joined United Parcel Service in 1923, while UPS was still in its infancy. Although Johnson eventually became one of the company's vice presidents, he never made more than $14,000 per year. Despite his low salary, Johnson dedicated a portion of every paycheck to investing. By his 90th birthday, Johnson had accrued nearly $70 million. Today, Johnson's legacy lives on through a scholarship foundation he created before his death.
The story of Theodore Johnson is not typical, but it illustrates perfectly the idea that accumulating wealth can lead to a better quality of life. As Secretary of the U.S. Department of Housing and Urban Development (HUD), I know that wealth accumulation through homeownership is the key to financial independence and self-sufficiency.
If you don't already own a home, I'd like to suggest that becoming a homeowner in 2005 be among your New Year's resolutions.
Homeownership brings countless benefits. When you make a mortgage payment, you're building equity, which is an investment in your family's future. Owning a home can qualify you for tax breaks that actually lower your monthly out-of-pocket costs. And homeownership provides the kind of freedom, stability, and security that is attainable in few other ways.
As long as you have a steady salary, good credit, and few long-term debts, purchasing a home is probably within your reach. And by taking things one step at a time, you'll find that buying a home can be a very manageable process.
The most important advice I can offer is to aim for a house that you can afford, which is generally about two-and-one-half times your annual salary. So if you're making $50,000 and you have good credit, you can probably afford a $125,000 home.
Downpayments are less intimidating than you might think. Only a few years ago, conventional loans required 10-20% down on the purchase of a home. Today, downpayments are significantly lower, and with good credit, you may qualify for an FHA-backed loan that only requires a downpayment of 3%. First-time homebuyers might even be eligible for help with their downpayments and closing costs through HUD's new American Dream Downpayment Initiative.
Throughout the buying process, there are plenty of avenues for getting help. HUD-certified experts in homeownership counseling know the problems - and how to avoid them. HUD's website is a great tool for finding homeownership counseling. If your credit history is tarnished, housing counselors can help you restore your credit and put you on the path to homeownership.
A good real estate agent - one who ideally comes recommended by family or friends - is another invaluable resource. Real estate agents should listen carefully to you, understand your needs, and offer sound judgment. If the agent makes you feel comfortable and can provide you with the knowledge and services you need, then you've chosen the ideal agent.
Buying a home is one of the most important steps a family can take toward realizing the American dream. So for 2005, consider making a resolution to buy your first home. HUD and our partners are here to help ensure that this is one resolution you keep.