The facts are clear and uncontrovertible. In 2001 and 2002, the US was facing a soft ecomony and potential recession. In order to stimulate the economy, the Bush Administration looked to Housing. The Administration pushed for low interest rates and created a huge initiative to increase home ownership numbers to the largest in U.S. history in order to save the economy. This program gave the green light to easy lending standards and unscrupulous loans with no governmental oversight.
In order to agressively increase the housing numbers, the Administration initiated in 2002, as part of their "Ownership Society" program, "America's Home Ownership Challenge". The goal of this program was to greatly increase home ownership and, in particular, minority, low income, and new immigrant home ownership. As part of this program, the Administration sought to "dismantle barriers to homeownership" including regulation of the mortgage industry and mortgage loan products. The Bush Administration pushed the mortgage industry to "aggressively develop new mortgage products" and challenged the real estate, mortgage, and finance industries to "join in the effort to tear down barriers of home ownership." The Bush Administration challenged the mortgage industry to "loosen credit standards" and to "make riskier loans."
It was under this Bush Administration incentive program that most of these loans, that are now going bad, were created. For a couple years, the Bush Administration touted their success in encouraging more "creative mortgages" that allowed people to become homeowners. They also routinely pointed to the housing numbers to show that their economic policies were working to keep the U.S. economy out of a recession. Bush even personally took credit in speeches for the fact that there were more "creative" loan products that were allowing people who would otherwise have not been able to do so to get loans. The Bush Administration even pushed a "Zero-Downpayment Initiative" to try to allow people to get mortgages with no money down.
Rather than using sound economic policies to stimulate the economy, the Bush Administration and Republican Congress pushed the mortgage and lending industry to loosen lending standards. Also, Bush's aggressive push for "creative loan products" and "to reduce barriers to home ownership" gave the green light to lenders to create unconscionable loan products with interest rates that would shoot up in a couple of years to rates which no one could afford to pay. The problem is that many of the homeowners now loosing their homes could pay their mortgage with a reasonable interest rate. But, when their interest rate was scheduled to shoot up to, in some cases over 15%, they could not refinance because their home value dropped and no bank would give them a mortgage for the amount that they currently owe on the home because it is more than the current value of the home. The blame for this mess belongs right on the doorstep of the Republican "Ownership Society."
You can search the White House Archives for "America's Home Ownership Challenge" to find some of Bush's press releases on this. You can also find Bush's "America's Homeowner Challenge" at http://www.whitehouse.gov/... http://www.whitehouse.gov/... and www.whitehouse.gov/news/releases/2002/06/20020617.html.
I have copied some of the press releases, news stories, and radio addresses for your review.
CHAPTER 2
MOBILIZING THE PRIVATE SECTOR: AMERICA’S HOMEOWNERSHIP CHALLENGE
Establish a national goal of at least 5.5 million new minority homeowners before the end of the decade.
Challenge the private sector real estate and mortgage finance industries to dramatically increase their efforts to reduce the barriers to homeownership faced by minority families and to work with the nonprofit sector in a concerted effort to achieve this goal through national and local partnerships.
Convene a White House Conference on Increasing Minority Homeownership, to highlight the homeownership barriers faced by minorities and develop proposed
solutions.
The strength of our Nation lies in the diversity of our people and our communities. This diversity extends beyond heritage or ethnicity, however. It also encompasses a diversity of local markets. Factors affecting real estate and, more importantly, homeownership, are greatly affected by local conditions. The various barriers to homeownership differ by locality. Hispanics living in the Bronx face a different set of obstacles and require different solutions than those living in Miami, or in San Antonio.
While minority homeownership rates increased in the 1990s due to a variety of favorable circumstances (including record-low interest rates and a strong economy), these increases are cause for celebration, not complacency. The Administration is intent on fostering a climate conducive to homeownership growth, and dismantling and eliminating the barriers faced by minority families is an integral part of this effort. As long as these barriers exist, homeownership levels for minority families will not be where they should be. Yet because of the variety of needs and differences between our communities, a "one size fits all" approach or government program alone is unlikely to have a sufficiently widespread impact.
The Administration also hopes to expand homeownership opportunities by focusing the energy and creativity of the private sector real estate and mortgage-finance industries, as well as the nonprofit sector, on this important goal. A national campaign that mobilizes thousands of homebuilders, realtors, and lenders, as well as the nonprofit groups involved in community revitalization and financial education efforts, to tear down barriers to homeownership, will have a profound impact. Such an effort is more likely to give rise to approaches tailored to local conditions and driven by local action.
To that end, the Administration has issued "America’s Homeownership Challenge" to homebuilders, realtors, nonprofits, and government-sponsored enterprises that purchase the mortgages made by lenders, to unite in a concerted, multifaceted and collaborative effort to dismantle barriers to homeownership in each community and increase the number of minority homeowners by at least 5.5 million families by the end of this decade. This broad-based effort will (1) harness the capital and expertise of major private sector financial institutions, (2) involve minority advocacy groups in key roles to guide industry efforts, and (3) complement the legislative and regulatory initiatives put forth by the Administration to achieve this goal.
Although long-range projections of homeownership growth rates can prove unreliable, under almost any projection scenario, adding 5.5 million families to the number of minority homeowners by the end of this decade would be a substantial achievement that could be accomplished only with great effort.
As an initial response to President Bush’s challenge, a number of national organizations involved in homeownership have agreed to commit specific resources, devote organizational energy, and begin taking concrete actions to reduce barriers and achieve this goal. Some of the measures to be taken include:
A substantial increase of at least $440 billion in the financial commitment made by the government-sponsored enterprises involved in the secondary mortgage market, specifically targeted toward the minority market;
Twenty-five different local initiatives to be undertaken across the nation, geared toward eliminating the specific homeownership barriers faced by minority families in those communities;
A commitment to raise $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 of 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.
These are simply beginning efforts in what is meant to be an ongoing challenge to the private sector. To continue finding new strategies to expand opportunities, and in order to maintain a strong focus on this goal, the White House will convene a conference on increasing minority homeownership, both as a forum for continued discussion of how best to tear down the barriers to homeownership and to promote successful strategies that expand opportunities.
Accountability and results will be expected and measured. The entities will voluntarily report to the Secretary of Housing and Urban Development annually on the progress of each of their initiatives. The Secretary will track the overall progress made in these areas and report annually to the President.
The Administration expects that this concerted national effort will result in greater production and rehabilitation of affordable homes where the existing supply is inadequate, increased innovation in mortgage products, more effective marketing and outreach to minority communities, and increased attention to financial education.
Bush’s Radio Address on June 15, 2002
THE PRESIDENT: Good morning. Owning a home lies at the heart of the American dream. A home is a foundation for families and a source of stability for communities. It serves as the foundation of many Americans' financial security. Yet today, while nearly three-quarters of all white Americans own their homes, less than half of all African Americans and Hispanic Americans are homeowners. We must begin to close this homeownership gap by dismantling the barriers that prevent minorities from owning a piece of the American dream.
The single greatest hurdle to first time homeownership is a high down payment requirement that can put a home out of reach. So my administration is proposing the American Dream Down Payment Fund. When a low-income family is qualified to buy a home, but comes up short on the down payment, the American Dream Down Payment Fund will help provide the needed funds. We estimate that this fund will open the door to homeownership for 40,000 low-income families annually.
A second obstacle to minority homeownership is a lack of affordable housing. To encourage the production of single-family homes for sale in neighborhoods where affordable housing is scarce, my administration is proposing a single-family affordable housing credit. Over the next five years, this will provide developers nearly $2.4 billion in tax credits for building affordable single-family housing in distressed areas. These credits will make 200,000 new homes available over its first five years to low-income purchasers.
A third major obstacle to minority homeownership is the complexity and difficulty of the purchasing process. So we're stepping up our efforts to better educate first-time home buyers. Consumers need to know their rights and responsibilities as home buyers. Education is the best protection for families against abusive and unscrupulous lenders. Financial education and housing counseling can help protect home buyers against abuses, greatly improve the loan terms they are offered, and help families get through tough times with their homes intact.
Through these important initiatives, we can help thousands of American families live the kinds of lives they had once only dreamed about. But government action isn't enough. We need to energize and engage the private sector, as well. That is why I have challenged the real estate industry leaders to join with the government, with non-profit organizations, and with private sector financial institutions in a major nationwide effort to increase minority homeownership.
My approach to broadening homeownership focuses on empowering people to help themselves, and to help one another. These important initiatives will accomplish their purpose because Americans, working together and taking responsibility for one another, will make this great country even greater.
The strength of America lies in the honor and the character and goodwill of its people. When we tap into that strength, we discover there is no problem that cannot be solved in this wonderful land of liberty.
Thank you for listening.
Bush’s Radio Address on March 27, 2004
THE PRESIDENT: Good morning. This week brought good news about homeownership in America. The Census Bureau reported that new home sales in February rose to an annual pace of 1.16 million homes, a 24 percent increase over the past year. This success follows one of the most impressive years in America's housing industry. More homes were sold in 2003 than ever before. Housing starts last year were at their highest level in a quarter century. Rising home values have helped take the wealth of American households to a new record level.
In our growing economy, more Americans can afford a new home. Incomes are rising. The unemployment rate is falling. Mortgage rates are low. And because of tax relief, Americans have more to save, spend and invest -- and that means millions of American families have moved into their first homes.
Our nation's 68 percent homeownership rate is the highest ever, and our government is taking steps to make owning a home a reality for more Americans, especially minorities and those with low incomes. In June 2002, I set the goal of adding 5.5 million new minority home owners in America by the end of this decade. Since then, more than 1.5 million minority families have moved into houses of their own. And for the first time, most minorities own their own home.
We are building on this progress. I have signed into law the American Dream Down Payment Act, which will help low-income Americans to afford the down payment and closing costs on their first home. I'm asking Congress to provide an annual $200 million for this program. That additional money would help an estimated 40,000 low-income families every year become first-time homeowners. I'm proposing that we make zero down payment loans available to first-time buyers whose mortgages are guaranteed by the Federal Housing Administration. And this will help about 150,000 families buy homes in the first year alone.
Another obstacle to homeownership is the often complicated process of buying a home and getting a loan. My budget for 2005 would more than double funding for housing counseling services from 2001 levels.
A house and a mortgage represent a big personal commitment, and we want to prepare more Americans to make that commitment with confidence. To make homeownership attainable for more of our citizens, I have asked Congress to create a tax credit to encourage the construction of affordable homes. Under my proposal, builders will have an incentive to provide an additional 200,000 affordable homes over five years for families with low incomes.
And finally, we are encouraging the real estate and mortgage finance industry to join in our efforts in closing the homeownership gap. More than two dozen major companies and organizations have committed to extending more loans to low-income families, financing the construction of more affordable homes, and providing financial counseling to potential buyers. These policies will make a difference in the lives of millions of Americans.
This week, I met with Lori Benavidez, a single mom living in Albuquerque, New Mexico. Last November, with the help of a federal homeownership program, she moved into her first home. Here's what Lori says: "I never thought the day would happen when my girls and I would be sitting in our own home. It is a miracle."
Every time a family moves into a home of their own, it fulfills a dream and it shows faith in the future, and that faith is well-placed because America's economy is strong and it is getting stronger.
Thank you for listening.
AUGUST 31, 2004: Thanks to President Bush's leadership, more people than ever own their home. And, more than half of minorities
September 15th, 2008 are now home owners -- the highest level in history.
The President's American Dream Downpayment Act is helping people overcome one of the biggest hurdles to being a homeowner -- finding the money for a downpayment.
Since the President announced his plan in 2002, more than 1.6 million minorities have become homeowners.
On September 2, 2004, Bush challenged the mortgage companies to cut people slack and make everyone a homeowner. The mortgage industry scarfed up the business, giving people zero interest loans, and adjustable mortgages, heck, no verification of income needed, just a hand shake and a signature. Bush wanted to be the good-ole president who made it possible for anyone to own a home. Well, he got his goal and since then, everything fell apart. Wall Street got greedy too and hand in hand, we now have a society of more people in foreclosure and losing their homes than ever before.
Housing: Help low-income purchasers, and housing developers
Bush’s main proposals on housing:
• Creation of an "American Dream Downpayment Fund" to allow low-income families to use HUD rental vouchers to make a down payment on a home. Bush says this could help as many as 650,000 families become homeowners.
• A tax break aimed at real estate investors that would provide them with tax credits of up to 50% of costs, totaling $1.7 billion over five years. This tax credit would provide incentives for private investors to redevelop single-family housing or build new homes for low- and moderate-income Americans. Bush said he expects this plan would build or rehabilitate 100,000 homes in five years.
• Individual development accounts giving tax credits and other financial incentives for low-income families to save money for a home purchase, for education costs, or to start a business.
Source: Washington Post, p. G5 Oct 28, 2000
Bush hails 'growing' economy
President touts numbers on home ownership
Thursday, May 6, 2004 Posted: 1:08 PM EDT (1708 GMT)
ALBUQUERQUE, New Mexico (CNN) -- President Bush traveled Friday to New Mexico, the state that was decided by the closest margin in 2000, where he hailed a "growing" U.S. economy and record home ownership.
The president's speech laid out his positive view of the economy just minutes before Democratic presidential contender Sen. John Kerry, in Michigan, unveiled part of his economic plan, saying America "cannot afford" four more years of job losses under Bush.
"Thanks to being the most productive workforce in America, and I might say, thanks to good policies, this economy is strong and it's getting stronger," Bush told supporters.
Noting that 68 percent of Americans own their own homes, Bush said, "Home sales were the highest ever recently. That's exciting news for the country."
New Mexico is a battleground state in the presidential race. In 2000, Al Gore won by 366 votes -- fewer than Bush won by in Florida. Forty percent of New Mexico residents are Hispanic, and Bush has been advertising heavily in both English and Spanish.
Kerry has the support of popular Democratic Gov. Bill Richardson.
Later, Bush traveled to Arizona to deliver a similar speech in Phoenix.
The speeches in the key Southwest states were billed as official White House events, not campaign stops, meaning they were paid for by taxpayers.
At the speech in Albuquerque, Bush tied what he called a "growing economy" to his series of tax cuts -- including a boost in the child tax credit and breaks for small businesses -- and he called on Congress to make them permanent.
He also discussed his proposal to provide temporary worker cards for non-U.S. citizens. "This is not an amnesty program," which would "encourage further illegal immigration," he said. But "my attitude is if a builder back here can't find an American willing to do the job, they ought to have the ability to put someone on the job who can do the job."
Bush never mentioned Kerry by name, but he seemed to have Democratic critics on his mind when he spoke about international trade. "Economic isolationism will lead to economic stagnation -- we can't have that," he said.
Kerry has called for a tax cut to stop the "outsourcing" of U.S. jobs overseas. Bush and others in his campaign have accused Kerry of being an isolationist, but Kerry has denied the charge, insisting he supports trade so long as policies are enforced that will protect jobs.
Bush said that while some jobs are going overseas, others "from overseas are coming here. The best way to make sure people can find work in America is to make sure the business environment is strong and solid."
White House officials said the campaign was hoping for positive local news coverage after a week in which national media coverage of the president has been dominated by accusations by Bush's former counterterrorism chief, Richard Clarke, that Bush did not take adequate steps to fight terrorism before September 11, 2001.
CNN's Dana Bash contributed to this report.
Bush seeks to increase minority homeownership
By Thomas A. Fogarty, USA TODAY 1/20/2004
In a bid to boost minority homeownership, President Bush will ask Congress for authority to eliminate the down-payment requirement for Federal Housing Administration loans.
In announcing the plan Monday at a home builders show in Las Vegas, Federal Housing Commissioner John Weicher called the proposal the "most significant FHA initiative in more than a decade." It would lead to 150,000 first-time owners annually, he said.
Nothing-down options are available on the private mortgage market, but, in general, they require the borrower to have pristine credit. Bush's proposed change would extend the nothing-down option to borrowers with blemished credit.
The FHA isn't a direct lender, but guarantees loan payments for mortgages on moderately priced owner-occupied property. The FHA guarantee now permits private lenders to finance as much as 97% of the purchase price of a home for millions of low- and middle-income borrowers.
In the proposal soon to be delivered to Congress, Bush would allow the FHA to guarantee loans for the full purchase price of the home, plus down-payment costs. As a practical matter, the FHA would guarantee mortgages as high as 103% of the value of the underlying property.
Weicher says the change is aimed at potential home buyers whose credit excludes them from the private mortgage market. Borrowers would need sufficient income to meet monthly payments. But, he said, the plan would eliminate the single largest impediment to homeownership for millions of households — lack of money for a down payment.
The most recent government figures show a national home ownership rate of 68.4%, the highest ever. But less than half of black and Latino householders own the home in which they live. Bush has a goal of 5.5 million new minority homeowners this decade.
FHA loans carry higher risks of delinquency and foreclosure than do private mortgages, and the proposed change presumably will lead to greater losses to the government than the current program does.
Weicher said the added risk will be offset by higher fees charged to borrowers who opt to make no down payment.
On a $100,000 mortgage with an interest rate of about 6%, the nothing-down borrower could expect closing costs $750 higher than other FHA customers. Monthly house payments would be slightly higher.
Mortgage analyst Keith Gumbinger of financial publishers HSH Associates says the Bush plan "would fill at least a small niche in the mortgage market" — first-time buyers with somewhat impaired credit.
Affordable-housing advocate Scott Syphax, CEO of Nehemiah Corp., called the proposal "revolutionary." It marks the clearest official acknowledgment that millions of potential homeowners are being blocked by high down-payment costs, he says.
President Reiterates Goal on Homeownership
Remarks by the President on Homeownership
Department of Housing and Urban Development
Washington, D.C. Video (Real) Video (Real)
Audio
En Español
Policy in Focus: Home-Ownership
10:30 A.M. EDT
THE PRESIDENT: Well, thank you all very much for that kind welcome. I'm here for a couple of reasons. First, I want to thank you all for your service to the greatest nation on the face of the Earth. (Applause.) I'm here to celebrate National Homeownership Month, because I believe owning a home is an essential part of economic security. And I'm concerned about the security of America. (Applause.)
I had the pleasure on June the 12th of speaking to the last President who visited HUD. I wish number 41 a happy birthday. (Applause.) And I'm glad you've invited me here today, I really am. I first am really proud of Mel Martinez and Alphonso Jackson. I've known Mel for a while, I've known Alphonso for a long time. There was no question in my mind that these two fine Americans would do a great job in leading this important agency. (Applause.)
I want to thank all those who have assumed leadership roles, who have left your states and your friends to come and serve America. And that's important. Service to our country is an incredibly important part of being an American.
I want to thank all those who have worked here for a short time and long time, who will be here after we leave. I want to thank a man named Larry Thompson, who has worked here for -- where's Larry? (Applause.) Larry's been here for 30 years. And I want to -- appreciate your service, Larry, and thank you for setting such a fine example for many others inside this building who serve the country.
Let me first talk about how to make sure America is secure from a group of killers, people who hate -- you know what they hate? They hate the idea that somebody can go buy a home. They hate freedom; that's what they hate. They hate the fact that we worship freely. They don't like the thought of Christian, Jew and Muslim living side by side in peace. They don't like that at all. And therefore, they -- since they resent our freedoms, they feel like they should take out their resentment by destroying innocent lives. And this country will do everything we can possibly do to protect America. (Applause.)
And that's going to mean making sure our homeland is secure, and I appreciate the progress we're making on setting up a Department of Homeland Security. I know it's going to be hard for some in Congress to give up a little power here and there, but I think it's going to happen because people realize we're here to serve the American people, not here to serve a political party or turf in the United States Congress. (Applause.)
But the best way to secure the homeland is to hunt them down one by one. And I mean hunt them down one by one and bring them to justice, which is precisely what America will do. (Applause.)
I want to thank the choir for coming, the youngsters for being here. I just want you to know that, when we talk about war, we're really talking about peace. We want there to be peace. We want people to live in peace all around the world. I mean, our vision for peace extends beyond America. We believe in peace in South Asia. We believe in peace in the Middle East. We're going to be steadfast toward a vision that rejects terror and killing, and honors peace and hope.
I also want the young to know that this country, we don't conquer people, we liberate people -- because we hold true to our values of life and liberty and the pursuit of happiness. The security of our homeland, the need to make sure that America is safe and secure while we chase peace is my number one priority for the country.
But I've got another priority, as well. I not only want America to be safer and stronger, I want America to be better. (Applause.) I want America to be a better place. I worry about our economy, because there are people who can't find work who want to work. In this town, people look at numbers all the time -- you know, such and such a number dropped, or this number increased. What I worry about are hearts and souls. That's what I worry about. And if somebody is trying to find work who can't find work, we need to continue to expand our job base. (Applause.)
We also have got to understand, in this land of plenty, there are pockets of hopelessness and despair. You know, I mentioned the word American Dream in Atlanta. I also recognize that some people aren't sure that dream extends to them. Some people don't even know what the dream means. And our job -- our jobs, our collective jobs, is to make sure that notion of the American Dream extends into every single neighborhood around this country. (Applause.)
I know this isn't the right department when I talk about education, but education, making sure every child is educated and no child is left behind, is part of making sure the American Dream extends to every single neighborhood in America. (Applause.) And we're making progress in a practical way when it comes to educating children, because, you know what, for the first time the federal government says, if you receive money, you need to let us know whether the children are learning to read and write and add and subtract. And if they are, we'll praise the teachers and praise the parents and praise the administrators. But if not, if our children can't read and write and add and subtract, instead of just hoping something changes, we're going to use the accountability system to insist upon change, so every child has a chance to realize the dream in America. (Applause.)
But I believe owning something is a part of the American Dream, as well. I believe when somebody owns their own home, they're realizing the American Dream. They can say it's my home, it's nobody else's home. (Applause.) And we saw that yesterday in Atlanta, when we went to the new homes of the new homeowners. And I saw with pride firsthand, the man say, welcome to my home. He didn't say, welcome to government's home; he didn't say, welcome to my neighbor's home; he said, welcome to my home. I own the home, and you're welcome to come in the home, and I appreciate it. (Applause.) He was a proud man. He was proud that he owns the property. And I was proud for him. And I want that pride to extend all throughout our country.
One of the things that we've got to do is to address problems straight on and deal with them in a way that helps us meet goals. And so I want to talk about a couple of goals and -- one goal and a problem.
The goal is, everybody who wants to own a home has got a shot at doing so. The problem is we have what we call a homeownership gap in America. Three-quarters of Anglos own their homes, and yet less than 50 percent of African Americans and Hispanics own homes. That ownership gap signals that something might be wrong in the land of plenty. And we need to do something about it.
We are here in Washington, D.C. to address problems. So I've set this goal for the country. We want 5.5 million more homeowners by 2010 -- million more minority homeowners by 2010. (Applause.) Five-and-a-half million families by 2010 will own a home. That is our goal. It is a realistic goal. But it's going to mean we're going to have to work hard to achieve the goal, all of us. And by all of us, I mean not only the federal government, but the private sector, as well.
And so I want to, one, encourage you to do everything you can to work in a realistic, smart way to get this done. I repeat, we're here for a reason. And part of the reason is to make this dream extend everywhere.
I'm going to do my part by setting the goal, by reminding people of the goal, by heralding the goal, and by calling people into action, both the federal level, state level, local level, and in the private sector. (Applause.)
And so what are the barriers that we can deal with here in Washington? Well, probably the single barrier to first-time homeownership is high down payments. People take a look at the down payment, they say that's too high, I'm not buying. They may have the desire to buy, but they don't have the wherewithal to handle the down payment. We can deal with that. And so I've asked Congress to fully fund an American Dream down payment fund which will help a low-income family to qualify to buy, to buy. (Applause.)
We believe when this fund is fully funded and properly administered, which it will be under the Bush administration, that over 40,000 families a year -- 40,000 families a year -- will be able to realize the dream we want them to be able to realize, and that's owning their own home. (Applause.)
The second barrier to ownership is the lack of affordable housing. There are neighborhoods in America where you just can't find a house that's affordable to purchase, and we need to deal with that problem. The best way to do so, I think, is to set up a single family affordable housing tax credit to the tune of $2.4 billion over the next five years to encourage affordable single family housing in inner-city America. (Applause.)
The third problem is the fact that the rules are too complex. People get discouraged by the fine print on the contracts. They take a look and say, well, I'm not so sure I want to sign this. There's too many words. (Laughter.) There's too many pitfalls. So one of the things that the Secretary is going to do is he's going to simplify the closing documents and all the documents that have to deal with homeownership.
It is essential that we make it easier for people to buy a home, not harder. And in order to do so, we've got to educate folks. Some of us take homeownership for granted, but there are people -- obviously, the home purchase is a significant, significant decision by our fellow Americans. We've got people who have newly arrived to our country, don't know the customs. We've got people in certain neighborhoods that just aren't really sure what it means to buy a home. And it seems like to us that it makes sense to have a outreach program, an education program that explains the whys and wherefores of buying a house, to make it easier for people to not only understand the legal implications and ramifications, but to make it easier to understand how to get a good loan.
There's some people out there that can fall prey to unscrupulous lenders, and we have an obligation to educate and to use our resource base to help people understand how to purchase a home and what -- where the good opportunities might exist for home purchasing.
Finally, we want to make sure the Section 8 homeownership program is fully implemented. This is a program that provides vouchers for first-time home buyers which they can use for down payments and/or mortgage payments. (Applause.)
So this is an ambitious start here at the federal level. And, again, I repeat, you all need to help us every way you can. But the private sector needs to help, too. They need to help, too. Of course, it's in their interest. If you're a realtor, it's in your interest that somebody be interested in buying a home. If you're a homebuilder, it's in your interest that somebody be interested in buying a home.
And so, therefore, I've called -- yesterday, I called upon the private sector to help us and help the home buyers. We need more capital in the private markets for first-time, low-income buyers. And I'm proud to report that Fannie Mae has heard the call and, as I understand, it's about $440 billion over a period of time. They've used their influence to create that much capital available for the type of home buyer we're talking about here. It's in their charter; it now needs to be implemented. Freddie Mac is interested in helping. I appreciate both of those agencies providing the underpinnings of good capital.
There's a lot of faith-based programs that want to be involved with educating people about how to buy a home. And we're going to have an active outreach from HUD. (Applause.)
And so this ambitious goal is going to be met. I believe it will be, just so long as we keep focused, and remember that security at home is -- economic security at home is just an important part of -- as homeland security. And owning a home is part of that economic security. It's also a part of making sure that this country fulfills its great hope and vision.
See, I tell people -- and I believe this -- that out of the evil done to America will come some incredible good. (Applause.) You know, they thought they were attacking a country so weak and so feeble that we might file a lawsuit or two, and that's all we'd do. (Laughter.) That's what they thought. We're showing them the different face of America. We're showing them that we're plenty tough. When it comes to taking somebody trying to take away our freedoms, we're tough, and we're going to remain tough and steadfast. (Applause.)
But I also want people to see the deep compassion of America, as well. I want the world to see the other side of our character, which is the soft side, the decent side, the loving side. I want people to know that when we talk about dreams, we mean big dreams. And when we talk about a free society, we want a society in which every citizen has the chance to advance, not just a few.
And part of the cornerstone of America is the ability for somebody, regardless of where they're from, regardless of where they were born, to say, this is my home; I own this home, it is my piece of property, it is my part of the American experience. It is essential that we stay focused on the goal, and work hard to achieve that goal. And when it's all said and done, we can look back and say, because of my work, because of our collective work, America is a better place. Out of evil came incredible good.
Thank you all for coming by.
11:07 a.m. ET, Sat., March. 27, 2004
CRAWFORD, Texas - Focusing on the dream of home ownership for the nation’s minorities, President Bush on Saturday credited his tax relief program for being a key to driving the housing market to record levels.
"Because of tax relief, Americans have more to save, spend and invest — and that means millions of American families have moved into their first homes," Bush said in his weekly radio address as he spent the weekend at his ranch.
In a swing through the Southwest on Friday, the president highlighted three of his economic policies he said can help nearly 400,000 low- or moderate-income families become home buyers.
One of the approaches, the American Dream Down Payment Act, will help low-income Americans afford the down payment and closing costs on their first home. Bush is asking Congress to provide $200 million a year for the program. He also proposes to make zero down-payment loans available to first-time buyers whose mortgages are guaranteed by the Federal Housing Administration.
In addition, Bush is proposing a tax credit to encourage builders to provide 200,000 affordable homes over five years for low-income families.
These and other steps, he said, will push the nation toward his goal of adding 5.5 million new minority home owners by the end of the decade.
Chapter 2
Mobilizing the Private Sector: America's Homeownership Challenge
• Establish a national goal of at least 5.5 million new minority homeowners before the end of the decade.
• Challenge the private sector real estate and mortgage finance industries to dramatically increase their efforts to reduce the barriers to homeownership faced by minority families and to work with the nonprofit sector in a concerted effort to achieve this goal through national and local partnerships.
• Convene a White House Conference on Increasing Minority Homeownership, to highlight the homeownership barriers faced by minorities and develop proposed solutions.
The strength of our Nation lies in the diversity of our people and our communities. This diversity extends beyond heritage or ethnicity, however. It also encompasses a diversity of local markets. Factors affecting real estate and, more importantly, homeownership, are greatly affected by local conditions. The various barriers to homeownership differ by locality. Hispanics living in the Bronx face a different set of obstacles and require different solutions than those living in Miami, or in San Antonio.
While minority homeownership rates increased in the 1990s due to a variety of favorable circumstances (including record-low interest rates and a strong economy), these increases are cause for celebration, not complacency. The Administration is intent on fostering a climate conducive to homeownership growth, and dismantling and eliminating the barriers faced by minority families is an integral part of this effort. As long as these barriers exist, homeownership levels for minority families will not be where they should be. Yet because of the variety of needs and differences between our communities, a "one size fits all" approach or government program alone is unlikely to have a sufficiently widespread impact.
The Administration also hopes to expand homeownership opportunities by focusing the energy and creativity of the private sector real estate and mortgage-finance industries, as well as the nonprofit sector, on this important goal. A national campaign that mobilizes thousands of homebuilders, realtors, and lenders, as well as the nonprofit groups involved in community revitalization and financial education efforts, to tear down barriers to homeownership, will have a profound impact. Such an effort is more likely to give rise to approaches tailored to local conditions and driven by local action.
To that end, the Administration has issued "America’s Homeownership Challenge" to homebuilders, realtors, nonprofits, and government-sponsored enterprises that purchase the mortgages made by lenders, to unite in a concerted, multifaceted and collaborative effort to dismantle barriers to homeownership in each community and increase the number of minority homeowners by at least 5.5 million families by the end of this decade. This broad-based effort will (1) harness the capital and expertise of major private sector financial institutions, (2) involve minority advocacy groups in key roles to guide industry efforts, and (3) complement the legislative and regulatory initiatives put forth by the Administration to achieve this goal.
Although long-range projections of homeownership growth rates can prove unreliable, under almost any projection scenario, adding 5.5 million families to the number of minority homeowners by the end of this decade would be a substantial achievement that could be accomplished only with great effort.
As an initial response to President Bush’s challenge, a number of national organizations involved in homeownership have agreed to commit specific resources, devote organizational energy, and begin taking concrete actions to reduce barriers and achieve this goal. Some of the measures to be taken include:
• A substantial increase of at least $440 billion in the financial commitment made by the government-sponsored enterprises involved in the secondary mortgage market, specifically targeted toward the minority market;
• Twenty-five different local initiatives to be undertaken across the nation, geared toward eliminating the specific homeownership barriers faced by minority families in those communities;
• A commitment to raise $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 of 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.
These are simply beginning efforts in what is meant to be an ongoing challenge to the private sector. To continue finding new strategies to expand opportunities, and in order to maintain a strong focus on this goal, the White House will convene a conference on increasing minority homeownership, both as a forum for continued discussion of how best to tear down the barriers to homeownership and to promote successful strategies that expand opportunities.
Accountability and results will be expected and measured. The entities will voluntarily report to the Secretary of Housing and Urban Development annually on the progress of each of their initiatives. The Secretary will track the overall progress made in these areas and report annually to the President.
The Administration expects that this concerted national effort will result in greater production and rehabilitation of affordable homes where the existing supply is inadequate, increased innovation in mortgage products, more effective marketing and outreach to minority communities, and increased attention to financial education.
[ Last Chapter
Fact Sheet: Expanding Homeownership Opportunities and Strengthening Our Economy En Español
Today's Presidential Action
Today, President Bush traveled to Ruiz Foods in Dinuba, California to discuss the economy, the strong housing market, and his homeownership agenda including the American Dream Downpayment Fund. The strong housing market is beneficial for communities across the Nation. Because of rising home values, Americans are enjoying three trillion dollars of greater housing wealth than they did in 2000. America's families are refinancing due to the lowest mortgage rates in 45 years, saving hundreds of dollars a month on their home payments.
The President called on the Senate to pass The American Dream Downpayment Act, which would help approximately 40,000 families a year with their down payment and closing costs, and further stimulate America's housing market.
Background on Today's Presidential Action
In June 2002, President Bush announced the goal of increasing the number of minority homeowners by at least 5.5 million before the end of the decade. The President'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. President Bush issued America's Homeownership Challenge to the real estate and mortgage finance industry to join the effort to take concrete steps 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 have been working hard to increase minority homeownership, and have already seen positive results:
• There are 809,000 new minority homeowners in the U.S. since the President's announcement.
• Nearly 1,500 low-income families are now using housing vouchers to pay their monthly mortgage or other costs of owning a home, and the Department of Housing and Urban Development (HUD) is working with public housing authorities to allow the sale of units to tenants.
• The Federal Trade Commission and HUD are working together to protect homebuyers from predatory lenders.
• The Federal Deposit Insurance Corporation is implementing their 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.
According to a study released in 2002 by HUD, meeting the President's goal to close the gap will involve $256 billion in economic activity in the form of construction and remodeling jobs, spending on household goods, and other benefits.
Californians Benefit from the President's Policies
The Jobs and Growth Act of 2003 is providing needed tax relief for working families and businesses in California through the acceleration of tax relief, elimination of the double tax on corporate dividends, and new incentives for businesses to grow. The President's actions are making a difference.
In California alone, nearly 11 million taxpayers are receiving tax relief under the Jobs and Growth Act of 2003.
• Taxes have been cut for 2.7 million small-business owners in California.
• The marriage penalty has been reduced for nearly 4 million California couples.
• The child tax credit has increased for 2.8 million California families.
For more information on the President's initiatives, please visit
www.whitehouse.gov
Fact Sheet: Dismantling the Barriers to Homeownership
Executive Summary
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.
President Bush has a comprehensive agenda to help increase the number of minority homeowners by at least 5.5 million before the end of the decade.
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.
A new report from the Department of Housing and Urban Development (HUD) - which analyzed the most recent homeownership data from the U.S. Census Bureau - highlights the many barriers that prevent minority families from owning their own home. The barriers include:
• A lack of inventory of affordable single-family housing available for sale in many areas where a majority of residents are minority families;
• A need for downpayment assistance, which affects minority families to a greater extent than non-Hispanic whites because they have less accumulated wealth that can be used to help children with downpayments;
• A lack of access to affordable mortgage credit;
• A lack of understanding of the homebuying process;
• Weak credit histories, often arising from a poor understanding of financial matters and where financial counseling is required;
• A lack of information about available homeownership programs in the community; and
• anguage difficulties or cultural differences.
It doesn’t have to be this way. 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 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.
• 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. Many organizations have already responded to the President’s challenge by committing to:
• Substantially increase 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.
Presidential Action
• President Bush met with first-time homebuyers in New Mexico and Arizona to discuss real results in efforts to dismantle the barriers to homeownership.
• The strong housing market is beneficial for families across America. New home sales for the month of February, released by the Census Bureau and the U.S. Department of Housing and Urban Development on Wednesday, indicate a 24.4% increase from February 2003 -- the third-highest level for new home sales ever. Regionally, new home sales in the West increased by 39.3% from February 2003. Sales of existing homes rose 5.7% from February 2003, as home buyers took advantage of low mortgage interest rates, according to a report issued yesterday by the National Association of Realtors.
• The overall U.S. homeownership rate was at a record high of 68.6% in the fourth quarter?its highest level ever. The President, in June 2002, announced the goal of increasing the number of minority homeowners by at least 5.5 million families before the end of the decade. Only 18 months later, the Census estimates an increase of 1.53 million minority homeowners. In the fourth quarter of 2003 -- for the first time ever -- the majority of minority households are now homeowners. The minority homeownership rate set a new quarterly record of 50.6%, up 1.3 percentage points from the third quarter.
• As a result of President Bush's pro-growth policies, America's economy is strong and getting stronger. Increased housing prices and new home construction have added nearly $4 trillion to homeowner wealth since the start of 2001. Cash-out refinancing added more than $130 billion to household budgets in the last three years.
Background on The President's Homeownership Initiative
President Bush is making a difference in the lives of American home buyers. The President's aggressive housing agenda includes providing down payment assistance through the American Dream Downpayment Initiative; increasing the supply of affordable homes through the Single-Family Affordable Housing Tax Credit; making a difference in the lives of low-income homebuyers with the Zero-Downpayment Initiative; and increasing home-buying education and counseling. President Bush also 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.
o President Bush signed the American Dream Downpayment Act into law in December 2003. This fund will help approximately 40,000 families a year with their down payment and closing costs and is set to begin helping families early this spring.
o Since 2001, President Bush has doubled the funding for housing counseling for families.
o President Bush proposed the Zero-Downpayment Initiative for Federal Housing Administration (FHA)-insured single-family mortgages for first-time homebuyers in his FY 2005 budget. FHA projections indicate that this new mortgage product would generate about 150,000 new homeowners in the first year alone.
o 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.
• President Bush's FY 2005 budget supports dismantling the barriers to homeownership by:
o Requesting $200 million for the American Dream Downpayment Initiative -- making a difference in the lives of low-income homebuyers.
o Providing $2.5 billion over five years to enact a permanent single-family housing tax credit to increase the supply of affordable single-family homes.
o Providing $45 million for housing counseling to support agencies counseling families on home-buying -- more than double the amount since 2001.
o Supporting rural homeownership through the Department of Agriculture with $2.7 billion in home loan guarantees for low- to moderate-income rural residents and $1.1 billion in direct loans for very low to low-income borrowers who are unable to secure a mortgage through a conventional lender. These loans are expected to provide 42,800 homeownership opportunities to rural families across America.
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