| HUD No. 06-059
HUD Public Affairs
June 1, 2006
JACKSON KICKS-OFF NATIONAL HOMEOWNERSHIP MONTH
FHA overhaul is centerpiece to further homeownership for lower income Americans
WASHINGTON - Housing and Urban Development Secretary Alphonso Jackson today launched a month-long campaign during June to build on President Bush's commitment to expand homeownership opportunities for all Americans. President Bush declared June National Homeownership Month and HUD, for its part, will focus on the Department's efforts to modernize Federal Housing Administration (FHA) programs to help even more families to become first-time homeowners.
"Owning a home is an American Dream, and today HUD is beginning a month-long nationwide campaign to help more families turn this dream into a reality," said Jackson. "Homeownership is good for our communities and great for our economy. The Bush Administration is committed to making sure all Americans have equal access to building financial independence and self-sufficiency through homeownership."
At homeownership fairs and other events planned throughout June, Jackson and other HUD officials will meet with prospective homebuyers and provide them with information to determine if homeownership is right for them. They will also discuss the role homeownership plays in helping families build wealth and strengthen their communities. For a complete listing of homeownership events around the country, visit HUD's website.
More Americans own their own home than ever before. The national homeownership rate is at a near record high of 68.5 percent and half of minority families are homeowners. Still, the President and Secretary Jackson recognize there is work to be done to make sure homeownership is accessible to everyone. Since President Bush challenged the nation in June 2002 to close the minority homeownership gap and create 5.5 million new minority homeowners by 2010, the Census Bureau reports that more than 2.5 million minority families have already taken out a mortgage on a new home.
To help make the homebuying process easier, HUD hopes to reform the 72-year-old Federal Housing Administration, making FHA more flexible in providing mortgage insurance and other loan services and help underserved and minority homebuyers avoid high-cost loans. For example, reducing the minimum cash contribution for an FHA loan would allow 500,000 additional renters to become homeowners, 22 percent of whom would be African American or Hispanic. Also, relaxing FHA credit standards for borrowers who could make a 10 percent cash downpayment would help an additional 1.1 million renters become homeowners, 26 percent of whom would be African American or Hispanic. Finally, FHA modernization reforms would allow the number of FHA-insured mortgages to double in six years.
The Bush Administration created several initiatives to expand the America Dream and create a society where every person has the opportunity to own a home, including:
- The American Dream Downpayment Initiative (ADDI). A key way to increase homeownership is by helping families overcome the financial hurdles of making a downpayment and paying closing costs. Under ADDI, HUD has made $236 million available to more than 400 state and local governments across the country since 2003. These funds have helped 15,500 first-time homebuyers.
- HOME Investment Partnerships Program (HOME). HOME funds encourage the production of affordable housing by financing the cost of land acquisition, new construction, rehabilitation, downpayment assistance, and rental subsidies. The Administration has proposed $1.9 billion for the HOME program to be allocated to over 600 state and local governments. Last year, HUD's HOME Program created 80,000 affordable homes - making 2005 the program's most successful year ever.
- Housing Counseling. The Administration recognizes that education plays a key role in helping families become homeowners. To help more Americans understand the home buying process and their financial options, the President has significantly boosted funding for housing education. The President's Fiscal Year 2007 Budget provides $44.55 million to help 600,000 homebuyers receive counseling services. Last year, HUD-approved counseling agencies assisted 1.83 million Americans. Annual funding for housing education has increased more than six-fold under since the President took office.
- From Section 8 to Homeownership. HUD is encouraging local housing agencies to use rental assistance vouchers to help more low-income and minority families climb the ladder of self-sufficiency through homeownership. This year, 8,000 families are participating in the Housing Choice Voucher Homeownership Program - quadrupling the number that participated last year.
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 and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and espanol.hud.gov.