June 20, 2003

Commentary

Homeownership: The Path to Prosperity

Mel Martinez
Secretary of the U.S. Department of Housing and Urban Development

When Carlos and Jane Arias immigrated to America from Peru, they carried with them the dream of owning their own home. But it seemed destined to remain out of reach.

The family spoke no English. They had no credit history in this country. And even if they could have qualified for a mortgage, they had little money to put towards a down payment and closing costs.

But with the help of homebuyer education programs and down payment assistance funded by the U.S. Department of Housing and Urban Development (HUD), the Arias family navigated their way through the process of establishing credit and arranging a mortgage.

Within 18 months of arriving in this country, they were no longer new immigrants with little hope of ever having a home of their own: Carlos and Jane were proud homeowners.

President Bush is committed to helping more families discover for themselves – just as the Arias family did – the security and sense of pride that comes with homeownership. He set in motion an Administration-wide drive to make homeownership an affordable option for every family that seeks it. For the second straight year, he has designated June as National Homeownership Month and directed HUD to take the homeownership message into every American community.

The HUD “Homeownership Express” bus is delivering that message by traveling the country in June, connecting families with resources that can bring them closer to the home of their dreams. In addition, each of HUD’s regional and local offices is highlighting homeownership during the month through fairs and other informational events.

Homeownership creates community 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, measurable ways.

And for the vast majority of families, homeownership serves as an engine of social mobility and the path to prosperity. Last year, Americans took [$80 billion] out of the wealth they had accumulated in their homes to make investments in education, consumer goods, and new businesses.

Homeownership is more than just a symbol of the American Dream; it is the backbone of our way of life.

Yet, many families find the pathway to homeownership blocked by persistent and difficult-to-scale barriers:

 Low-income families who could otherwise afford a monthly mortgage payment often cannot come up with enough cash for a down payment. Meeting the up-front costs of homeownership is the barrier individuals cite most frequently when asked about the obstacles to buying a home.

 For buyers who have never gone through it before, the homebuying process can be a bewildering maze of unfamiliar terms and unreliable information. This is especially true for recent immigrants and others for whom English is a second language.

 In parts of the United States, the average working family can have difficulty finding a house on the market that is within their price range.

 Some families cannot obtain an affordable mortgage because they lack credit history or have a poor credit record. Other prospective homebuyers have trouble finding financing options that fit within their budget.

The Bush Administration is clearing away these barriers by offering new tools and resources to the homeowners of tomorrow.

For instance, the American Dream Down-payment Initiative, which President Bush is funding at $200 million in 2004, will help make homeownership a reality for 40,000 cash-strapped families annually.

Another ambitious HUD program will provide housing education to 550,000 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 grant programs that communities can tap into to create affordable homes for low-income families. A proposed tax credit would encourage the production of affordable housing in areas where it is in short supply.

And HUD is fundamentally reforming the homebuying process to make it simpler and less costly for consumers.

While guided by the belief that homeownership benefits every family, the Bush Administration is particularly focused on encouraging homeownership among minorities.

Today, a record number of Americans own their own homes, yet a gap persists between the homeownership rates of minorities and non-minorities. By a significant margin, African-American, Hispanic, and Asian American families are less likely to own their own homes.

One year ago, President Bush announced a bold plan to close that gap and create 5.5 million new minority homeowners by 2010. He issued “America’s Homeownership Challenge” to the real estate, mortgage finance, and homebuilding industries and called on them to join the Administration in its commitment to increase homeownership rates for minorities.

HUD responded by launching the “Blueprint for the American Dream Partnership,” an unprecedented collaboration that is creating new homeownership opportunities by harnessing the resources of the federal government with those of the private sector.

Until the minority homeownership gap is closed, the Bush Administration will not be satisfied.

The story of the Arias family and their success in realizing the American Dream offers inspiration to every family seeking a home of its own. With the assistance of programs supported by HUD, families across the country who at one time never considered home-ownership an option are writing similar stories today.

The path to prosperity begins with a home of one’s own. For anyone ready to begin the journey, HUD and its partners stand ready to show the way.

To learn more, visit HUD online at www.hud.gov or espanol.hud.gov

Return to the Frontpage