On Monday, President Bush announced a new goal to help increase the number of minority homeowners by at least 5.5 million before the end of the decade. The President’s program includes, down payment assistance, increasing the supply of affordable homes, increasing support for self-help homeownership programs, and simplifying the home buying 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.
Background on the President’s Homeownership Agenda:
Buying a home is the biggest single investment most people will make in their lives. Homeownership is a cornerstone of America’s healthy, vibrant communities, and benefits individual families by helping them build stability and long term financial security. But sadly, homeownership is out of reach for many Americans - especially for minority families. For millions of these families, homeownership is a distant, unreachable dream.
While the overall homeownership rate has reached an all time high of nearly 68 percent, the statistics show a clear and persistent homeownership gap:
• Despite increases in minority homeownership during the decade of the 1990s, large persistent gaps between non-Hispanic whites and minorities remain and have narrowed only slightly;
• According to HUD, in 1994 the minority homeownership rate was 26.8 percent below the rate for white households;
• The African-American homeownership rate was 27.5 percentage points below the white rate, and the Hispanic rate was 28.8 percentage points below the white rate;
• The second quarter Census data for 2002 shows that non-Hispanic whites have a 74.3% homeownership rate, while African-Americans have a 48% rate and Hispanics a 47.6% rate; and
• Asian-Americans and other races have a 53.7% homeownership rate.
The President’s agenda will help tear down the barriers to homeownership that stand in the way of our nation’s African-American, Hispanic and other minority families by:
• Providing Downpayment Assistance. The single biggest barrier to homeownership is accumulating funds for a down payment. The President has proposed $200 million annually for the American Dream Downpayment Fund to help roughly 40,000 families a year with their down payment and closing costs.
• 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, such as 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. When buying a home today a buyer faces a confusing and complicated process. The President and HUD want to empower homebuyers by simplifying the home buying process so consumers can better understand and benefit from cost savings. The President also wants to expand financial education efforts so that families can understand what they need to do to become homeowners.
The President also believes that government alone can’t close America’s homeownership gap. It is critical that our government challenge the private sector to take concrete steps to tear down the barriers to homeownership that face minority families. The President is issuing “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 5.5 million families by the end of the decade.