Expanding
Homeownership Opportunities for All Americans
A strong housing market is beneficial for communities
across the Nation. On December 16, 2003, President Bush signed into law the
“American Dream Downpayment Act of 2003”, which will help approximately
40,000 families a year with their down payment and closing costs, and
further strengthen America’s housing market. This legislation complements
the President’s aggressive housing agenda announced in 2002 to dismantle the
barriers to homeownership.
America’s families have been refinancing due to
the lowest mortgage rates in 45 years, saving hundreds of dollars a month on
their home payments. The U.S. homeownership rate was 68.4% in the third
quarter-its highest level ever.
Background
The biggest barrier to homeownership is often
accumulating funds for a down payment. In June 2002, President Bush proposed
the American Dream Downpayment Fund to help low-income families take
much-needed steps to own a home of their own, and announced the goal of
increasing the number of minority homeowners by at least 5.5 million before
the end of the decade.
President Bush’s aggressive housing agenda to
dismantle the barriers to homeownership includes providing down payment
assistance through the American Dream Downpayment Fund; increasing the
supply of affordable homes through the Single-Family Affordable Housing Tax
Credit; increasing support for self-help homeownership programs like Habitat
for Humanity; simplifying the home-buying process; and increasing
home-buying education.
Dismantling the Barriers to Homeownership
President Bush issued America’s Homeownership
Challenge to the real estate and mortgage finance industries to encourage
them to join the effort to close the gap that exists between the
homeownership rates of minorities and non-minorities. The Bush
Administration and the America’s Homeownership Challenge partners in the
private sector are working hard to increase minority homeownership, and are
seeing positive results:
There are more than 1 million new minority
homeowners in the U.S. since the President’s announcement 18 months ago.
Nearly 1,500 low-income families are now using
housing vouchers to pay their monthly mortgage or other costs of owning
a home, and HUD is working with public housing authorities to allow the
sale of some units to tenants.
The Federal Trade Commission and HUD are working
together to protect homebuyers from predatory lenders.
The Federal Deposit Insurance Corporation is
continuing to implement the Money Smart program, which is providing
financial education services for potential homebuyers.
Through America’s Homeownership Challenge, more
than 2 dozen companies have made commitments to increase minority
homeownership, including pledges to provide more than $1.1 trillion in
mortgage purchases for minority homebuyers this decade.
The Bush Administration has begun the final
stage of its effort to reduce closing costs, simplify the settlement
paperwork, and eliminate surprise closing costs for American homebuyers
by reforming the rules governing the Real Estate Settlement Procedures
Act.
Strengthening Economic Activity
According to an analysis released in 2002 by HUD,
meeting the President’s goal to close the housing gap will involve $256
billion in economic activity in the form of construction and remodeling
jobs, spending on household goods, and other benefits. Because of rising
home values, Americans are enjoying more than $2.5 trillion of greater
housing wealth than they did at the beginning of 2001.