President Hosts Conference on Minority Homeownership
October 15, 2002
Today's Presidential Action
President George W. Bush hosted the White House Conference on Minority Homeownership to discuss public and private sector efforts to address the homeownership gap and increase the number of minority homeowners in America.
In June, President Bush announced the national goal of increasing the number of minority homeowners by at least 5.5 million by the end of this decade. Meeting the President's goal will not only help more Americans enjoy the benefits of owning their own homes it will also help strengthen America's economy. According to a study released today by the Department of Housing and Urban Development, meeting the President's goal will involve $256 billion in economic activity in the form of construction and remodeling jobs, spending on household goods, and other benefits.
Background on Today's Presidential Action
While the overall homeownership rate has reached an all-time high of nearly 68 percent, recent statistics point to a homeownership gap. The second quarter 2002 Census data show that non-Hispanic whites have a 74.3% homeownership rate, while African-Americans have a 48% rate, Hispanics a 47.6% rate; and Asian-Americans and other races a 53.7% homeownership rate.
In June, President Bush announced an aggressive homeownership agenda to dismantle barriers to homeownership by providing down payment assistance, increasing the supply of affordable homes, increasing support for self-help homeownership programs, and simplifying the homebuying process and increasing education. The President also issued "America's Homeownership Challenge" to the real estate and mortgage finance industries to join in his effort to increase the number of minority homeowners by taking concrete steps to tear down the barriers to homeownership that face minority families.
The Bush Administration is working to increase homeownership among minority Americans through a number of new and expanded initiatives, as well as through ongoing programs administered by HUD and other federal departments, including:
Providing Downpayment Assistance. The single biggest barrier to homeownership is accumulating funds for a downpayment. The President has proposed $200 million annually for the American Dream Downpayment Fund to help roughly 40,000 families a year with their downpayment and closing costs. In addition, the Administration has proposed the use of Section 8 funding to assist with downpayments, and provides downpayment assistance to low-income and minority homebuyers through the Community Development Financial Institutions (CDFI) Fund at the Department of Treasury.
Increasing the Supply of Affordable Homes. The President wants to dramatically increase the supply of homes available to low and moderate income families. The President has proposed the Single-Family Affordable Housing Tax Credit, which will provide approximately $2.4 billion to encourage the production of 200,000 affordable homes for sale to low and moderate income families.
Increasing Support for Self-Help Homeownership Programs. The President's budget triples funding for organizations like Habitat for Humanity that help families help themselves become homeowners through 'sweat equity' and volunteerism in their communities.
Simplifying the Home Buying Process & Increasing Education. Today's homebuyers face a confusing and complicated process. President Bush wants to empower homebuyers by making it easier for them to understand the process and benefit from cost savings. Through the Homebuyer Bill of Rights, the Bush Administration is proposing to make the settlement process easier for all consumers when purchasing a home, thereby protecting homebuyers through increased competition and simplicity. Working together, the Federal Trade Commission and HUD have begun targeting enforcement activities to stop predatory lenders from preying on uneducated homebuyers. The President also wants to expand financial education efforts so families can better understand what they need to do to become homeowners. The Departments of HUD, Treasury, and Education are working diligently to educate families about homeownership through counseling programs and financial literacy efforts. Specifically, HUD has proposed increasing housing counseling activities by 75% and is collaborating with the FDIC on a "MONEY SMART" program of financial education in minority neighborhoods.
Providing Better Financing Opportunities. The Departments of HUD and Agriculture make it possible for thousands upon thousands of families to achieve homeownership through the Federal and Rural Housing Administrations, which insure almost $100 billion in loans each year. The Administration also implemented a hybrid Adjustable Rate Mortgage (ARM) product that makes it easier for new homebuyers to stay in their homes in the first few years.
America's Homeownership Challenge
Since the President's call to action in June, private and nonprofit partners in the real estate and mortgage finance industries have been working with the Department of Housing and Urban Development to increase minority homeownership. Commitments made by these partners include:
Substantially increasing, by at least $440 billion, the financial commitment made by the government-sponsored enterprises involved in the secondary mortgage market specifically targeted toward the minority market.
Launching twenty-five different local initiatives across the nation, geared toward eliminating the specific homeownership barriers faced by minority families in those communities;
Raising $750 million in below-market-rate investments by 2007, which will work in collaboration with local homeownership initiatives and be targeted to heavily minority program areas;
Pursuing strategic partnerships in 20 top housing markets between homebuilders, lenders, local officials, and community leaders to develop approaches that address the local challenges to building homes for minority families living in urban centers;
Establishing faith-based housing partnerships between the participants and at least 100 churches, mosques, synagogues, and other faith-based institutions;
Aggressively developing new mortgage products so that conventional market alternatives are available to combat the predatory loan products that are disproportionately targeted to minorities;
Creating new mortgage products to meet the unique needs of recent immigrants;
Dramatically expanding financial education efforts for minorities, providing financial counseling to at least 380,000 minority families, and taking measures at the local level to reduce predatory lending; and
Establishing multilingual, consumer-oriented Internet Web sites designed to help minorities overcome barriers to homeownership, including creation of a central data bank of affordable housing programs made available to real estate agents when working with clients.
For more information on the President's initiatives, please visitwww.whitehouse.gov