Statement of Secretary Mel Martinez
April 8, 2003
before the Committee on Financial Services
Subcommittee on Housing and
U.S. House of Representatives
Ney, Ranking Member Waters, Distinguished Members of the Committee:
you for the invitation to join you this afternoon. I appreciate
this opportunity to outline the American Dream Downpayment Initiative.
The Initiative is a powerful tool for increasing homeownership,
and President Bush has proposed expanding its reach in Fiscal Year
2004 by increasing funding to $200 million.
Chairman, I applaud your leadership in calling this hearing.
want to commend my fellow Floridian - Congresswoman Harris - for
introducing H.R. 1276. Her bill has earned the support of 35 cosponsors
from both sides of the political aisle, reflecting the point I often
make that housing is a non-partisan issue - one that crosses the
lines of politics and party.
is a cornerstone of America, and the President and I are committed
to helping more families know its many - and profound - benefits.
families, homeownership represents 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 other priorities, such as starting
a business or sending a child to college. Homeownership creates
stakeholders who make their communities stronger by involving themselves
in local activities.
implications of large-scale homeownership reach well beyond the
benefits to individual families and communities, of course: homeownership
is a powerful economic force for the entire nation.
many sectors of the economy have performed below expectations over
the past two years, the housing market has remained extremely strong.
Housing was key to bolstering our economy in the months following
the terrorist attacks of September 11, 2001. 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.
a result of the exceptionally strong housing market and the best
financing conditions available in decades, more Americans own homes
today than at any time in our history: 68.3 percent of all Americans
are homeowners. Yet, we see a persistent and troubling gap between
the homeownership rates of minorities and non-minorities. By a significant
margin, minority families are less likely to own their own homes
- less than 50 percent for African-Americans and Hispanics.
the minority homeownership gap is one of this Administration's top
priorities�and a responsibility fundamental to HUD's mission as
the nation's housing agency.
year, the President announced an initiative to remove the barriers
that block American families from achieving the American Dream of
homeownership. By making homeownership easier for all Americans,
we hope to create 5.5 million new minority homeowners by the end
of this decade. HUD responded by launching our Blueprint for the
American Dream Partnership, and every segment of the housing industry
has joined with us to help meet the President's challenge.
Administration and its partners are focused on removing the barriers
that block too many families from achieving the American Dream of
homeownership. These barriers include a lack of financing options
for low-income families, a lack of information about the homebuying
process, a lack of affordable housing in some communities. The Administration's
homeownership agenda is dismantling these barriers to homeownership
by proposing a new FHA mortgage product, increasing support for
homeownership education programs, simplifying the homebuying process,
and increasing the supply of affordable homes.
barrier we are specifically addressing through the American Dream
Downpayment Initiative is high down payments and closing costs.
Coming up with enough cash to pay the upfront costs of homeownership
is often the single greatest barrier to buying a home. In Fannie
Mae's 2002 National Housing Survey, a high down payment was the
barrier most frequently cited by those polled; 32 percent of Americans
said they would have major difficulties making a down payment.
lack of savings is a problem for many lower-income and minority
families. Oftentimes, the transfer of family assets from parents
to their children can mean the difference in whether a family can
buy a home. These intergenerational wealth transfers serve to boost
homeownership by helping many younger families afford their first
many cases, however, lower-income and minority families simply lack
the accumulated wealth that can provide for down payment and closing
costs. To help families overcome this barrier to homeownership,
the Administration proposed the American Dream Downpayment Initiative
for FY 2002, and is asking the Congress to boost its funding level
to $200 million for FY 2004.
President's commitment to lifting families into homeownership through
down payment assistance dates back to his 2000 campaign. The American
Dream Downpayment Initiative fulfills one of his long-standing housing
Initiative is housed within the HOME Investment Partnerships program,
which helps communities across the country expand the supply of
decent, affordable housing. American Dream Downpayment Initiative
grants will be awarded to state and local governments to assist
low-income, first-time homebuyers with closing costs and down payments.
To receive assistance, families must have annual incomes that do
not exceed 80 percent of the area median income.
anticipate that the Initiative will help make homeownership a reality
for 40,000 families annually, providing an average subsidy of $5,000.
Although the American Dream Downpayment Initiative is not targeted
specifically at minorities, we believe it will be particularly effective
at reaching minority populations, based upon the history of the
HOME program. Today, fully 55 percent of the families helped by
HOME are minorities.
appropriated $75 million for the American Dream Downpayment Initiative
for the current fiscal year. I thank the Members for doing so. As
a result of your support, 15,000 families who have perhaps only
dreamed of homeownership will soon have homes of their own. We expect
to complete the rulemaking process within the next few months and
have the entire $75 million appropriation delivered by the end of
Fiscal Year 2003.
Congress now has an opportunity to build on its commitment and guide
even more families toward the American Dream of homeownership. I
urge the Committee to fund the American Dream Downpayment Initiative
at $200 million as requested by President Bush.
always, I welcome your guidance as we continue our work together.
Content Archived: June 25, 2010