Statement by Secretary Mel Martinez
June 12, 2003
before the U.S. Senate
Committee on Banking, Housing and Urban Affairs
Chairman Shelby, Ranking Member Sarbanes, Distinguished Members
of the Committee:
I appreciate the Chairman's invitation to appear before you this
morning. The Administration welcomes any opportunity to meet with
the Members and discuss the many ways in which we are working with
the Congress to expand homeownership for America's families.
The fact that June is National Homeownership Month, and a time
when we are taking the homeownership message to communities across
the country, makes the scheduling of this hearing especially appropriate.
President Bush is focused on helping more families discover for
themselves the security and sense of pride that comes with homeownership.
This is a long-time commitment of this President that he highlighted
during the presidential campaign in his "New Prosperity Initiative."
In remarks he gave in Cleveland, Ohio, on April 11 of 2000, then-Governor
Bush noted that the concept of "ownership" is central to American
life, and that our history has been intertwined with the expansion
of homeownership rights since the nation's earliest days.
He pledged that in the spirit of the Homestead Act of 1862, his
Administration would help Americans to own a part of the American
The President understands that homeownership is a profound and
For the vast majority of families, homeownership serves as an engine
of social mobility and the path to prosperity. Americans see a home
not only as shelter, but also as a safe investment, and one that
can be leveraged to finance family priorities. In 2001, Americans
took $80 billion out of the equity they had accumulated in their
homes to make investments in education, consumer goods, and new
There is no question that homeownership helps families lift themselves
into a better quality of life and a more secure future.
But the benefits of building a nation of homeowners extend well
beyond individual families and into their communities. Homeownership
creates stakeholders who tend to be active in charities and churches.
It inspires civic responsibility. It offers children a stable living
environment that influences their personal development in many positive
ways - including improving their performance in school. Studies
by housing experts show a clear link between an increase in homeownership
and a decrease in crime rates.
Of course, homeownership also has a powerful impact on the national
economy. Where many sectors of the economy performed below expectations
over the past two years, the housing market has remained extremely
strong. In fact, housing helped to cushion many areas of the country
from recession, as home sales and refinancings pumped hundreds of
billions of dollars into the economy.
But beyond the statistics, increasing homeownership is good public
This Administration wants every family to benefit from our emphasis
on homeownership. This includes reaching out to minorities who sometimes
face special obstacles on the road to owning their own homes.
At the end of last year, the national homeownership rate remained
at record-high levels. The minority homeownership rate reached a
record high as well. But those statistics mask a deep divide - what
we call the "homeownership gap." Across the board, minority homeownership
is about 20 percentage points below the rate for the population
as a whole.
Many minority families find the pathway to homeownership blocked
by persistent barriers. These barriers include the inability to
come up with enough cash for a down payment, a lack of credit history,
or a blemished credit record� discrimination, and the unfamiliar
terms and unreliable information that are often part of the homebuying
process. Minority families often face discrimination in conjunction
with or in addition to these other barriers.
President Bush and I consider removing these barriers for all families,
including minority families, to be a top priority for HUD, and one
that is fundamental to our mission as the nation's housing agency.
The President launched America's Homeownership Challenge last June
and announced his aspirational goal of boosting minority homeownership
by 5.5 million families by the end of the decade. In response, HUD
created the Blueprint for the American Dream Partnership. Each partner
has made specific commitments that will help us reach our goal of
dramatically boosting minority homeownership.
One of the ways we are clearing away the barriers to homeownership
is by offering new tools and resources to the homeowners of tomorrow.
For example, the American Dream Downpayment Initiative will help
make homeownership a reality for 40,000 families. The Initiative
is currently moving through the Congress, and we are working with
Members to get it passed and signed into law. Congress appropriated
$75 million for the American Dream Downpayment Initiative for the
current fiscal year.
We have proposed increasing funding for our housing education program
to $45 million, which would allow HUD to counsel 250,000 first-time
homebuyers next year. Helping families learn about the loan products
and services available to them and how to identify and avoid unscrupulous
lenders is critical to increasing homeownership.
The Administration is boosting funding for the HOME Investment
Partnerships Program by $210 million from the 2003 enacted level,
to a total of $2.2 billion in FY 2004. Both HOME and the Community
Development Block Grant programs are popular, successful, and locally
driven initiatives that communities can tap into to create affordable
homeownership opportunities for low-income families.
We are proposing a new Federal Housing Administration mortgage
insurance product, designed to create homeownership opportunities
for families with poor credit records who are served at a higher
cost in the subprime market or not served at all.
Our proposals also include a $1.7 billion Single-Family Affordable
Housing Tax Credit to encourage developers and nonprofit organizations
to produce affordable homes. The tax credit will make some 100,000
homes available for purchase in low-income neighborhoods.
During the 2000 campaign, the President announced a plan to give
another 2 million low-income Americans the opportunity to move into
their own homes with help from HUD's Section 8 Housing Choice Voucher
Program. We currently allow local housing officials to offer future
homebuyers the option of applying their vouchers toward a home mortgage;
our FY 2004 budget proposal would "expand the program" by allowing
families to also put their vouchers toward a home down payment.
These initiatives reflect just part of what has grown into an Administration-wide
commitment to making homeownership an affordable option for every
family that seeks it. With our assistance - and the support of the
Congress - low-income families across the country who at one time
never considered homeownership an option are becoming homeowners
We are proud of our accomplishments over the past two years, but
we do not intend to rest on them. There is much more we plan to
do, and by working closely with you, we will continue to open up
our communities to new opportunities for growth and prosperity,
and encourage more families to seek homeownership and begin traveling
the road to prosperity.
Content Archived: June 25, 2010