Throughout the month of June educational outreach efforts are underway to provide home buying information and financial tools to more families, particularly minorities, in celebration of National Homeownership Month. Buying a home is the single largest investment ever made by most households. Equity in the home offers an opportunity to build wealth.

The national homeownership rate during the first quarter of 2004 hit a record high of 68.6%. Over 72 million households are living the American dream of homeownership today, more than two-thirds of all U.S. households. Although more families of all racial and ethnic backgrounds own homes today, there are still sizeable differences in ownership rates among minority and white households, according to the latest Census Bureau estimates.

Looking back

Expanding homeownership has been the nation’s long-standing policy dating back to when Abraham Lincoln first signed the Homestead Act. President George W. Bush took this policy to a whole new level in June of 2002 with the White House Minority Homeownership Initiative, which outlined a comprehensive agenda to help increase the number of minority homeowners by at least 5.5 million before the end of the decade.

Mobilization efforts began with the issuance of "America's Homeownership Challenge" to the real estate and mortgage finance industries calling on both the public and private sectors to work together to promote working solutions to make homeownership achievable for more Americans.

In response to President Bush’s ambitious plan, the U.S. Department of Housing and Urban Development (HUD) created the "Blueprint for the American Dream Partnership," an unprecedented public/private initiative composed of two dozen member groups, bringing together the individual strengths of government, real estate and mortgage finance industries, affordable housing groups and advocacy organizations in a joint effort to tear down existing barriers and help millions of minority families reap the economic benefits of homeownership.

In a radio address to the nation on June 15, 2002, President Bush identified three major obstacles to minority homeownership: a high down-payment requirement making first-time homeownership out of reach for otherwise qualified families; the lack of affordable housing; and the complexity and difficulty of the purchasing process.

Moving ahead

Under the Bush Administration, we as a Nation have made great strides thus far:

• On December 16, 2003, the President signed into law the American Dream Downpayment Act of 2003, promising to aid approximately 40,000 families a year with downpayment and closing costs on their first home.
• The FY 2005 Budget promises to provide a record $45 million to support 550,000 families with home purchase and homeownership counseling and about 250,000 families with rental counseling. Counseling would help families learn about and understand the loan products and services available to them as well as identify and avoid predatory lending practices.
• To increase the supply of affordable homes the FY 2005 Budget would provide $2.4 billion over five years to enact the Single-Family Affordable Housing Tax Credit for developers of new or rehabilitated, affordable single-family housing in distressed neighborhoods, for the production of homes for low- and moderate-income homebuyers.
• The administration proposed a new sub-prime loan product called "Payment Incentives" to offer FHA insurance to families that, due to poor credit, would otherwise be served by the private market at a higher cost or not at all. Expected to serve 60,000 families per year, the new Mutual Mortgage Insurance (MMI) mortgage loan program would offer FHA loan insurance to borrowers to either maintain their home or to purchase a new home.
• This past May, acting Secretary of the U.S. Department of Housing and Urban Development, Alphonso Jackson, unveiled HUD’s simplified “SuperNOFA,” a notice that makes available $2.3 billion in 49 separate funding opportunities to help States, local governments and nonprofit grassroots organizations to house and serve lower income families. HUD’s streamlined grant application process “is creating a more level playing field for organizations of all sizes to apply for funds,” said Jackson in a statement released in Washington.
• Backed by the National Association of Realtors®, H.R. 3755, the "Zero Downpayment Act of 2004," introduced by U.S. Rep. Patrick Tiberi (R-Ohio), was approved by voice vote for consideration on the House floor this month by the U.S. House Financial Services Committee. The Zero Downpayment Act would essentially eliminate the downpayment requirement for families and individuals who buy homes with Federal Housing Administration (FHA)-insured mortgages.
• The Housing and Community Opportunity Subcommittee of the U.S. House Financial Services Committee met several days ago to discuss new proposed legislation to facilitate homeownership in high-cost areas. The FHA Single Family Loan Limit Adjustment Act of 2004, H.R. 4110, introduced earlier this year by U.S. Reps. Gary Miller (R-Calif.) and Barney Frank (D-Mass.) would increase FHA loan limits for single-family homes in high-cost areas to rise to the local area median-home price.

Aiming higher

There is still more work to be done to pave the way for more Americans to become first-time homeowners and help existing homeowners hold on to their American dream. Legislation is the key. Policy-makers must prioritize efforts to establish a more cost-efficient system that promotes homeownership.

Owning a home is no longer just a symbol of the American dream. It has become the foundation of the American way of life. Homeownership has proven to be the backbone of our economic strength.

Although other sectors of the economy experienced significant job losses throughout 2003, the housing market broke records. Today investing in real estate remains strong and resilient even with the recent increases in mortgage rates. Existing single-family home sales soared to its second best figure ever in April of this year, representing a 15.1 percent gain over the previous year. Sales prices of existing single-family homes continue to move solidly as the median price rose 7.3 percent from a year ago to the national median of $176,000. Although housing starts fell 2 percent in April to 1.967 million units, the pace remains at historically elevated levels, up 20 percent from the previous year, according to research by the National Association of Realtors®.

Every American should be given an opportunity to enjoy the economic benefits of homeownership. For our nation as a whole, increasing homeownership opportunities guarantees continued economic growth. The American dream can and should be for everyone. “The freest government cannot long endure when the tendency of the law is to create a rapid accumulation of property in the hands of a few, and to render the masses poor and dependent.” Daniel Webster as quoted by Sinclair, The Cry for Justice

Zoriana Fedunyszyn, Realtor®, ABR (Accredited Buyer Representative), e-PRO (Certified Internet Professional), RECS (Real Estate CyberSpace Specialist), Certified Residential Real Estate Appraiser, has over 10 years of real estate industry experience. She is the president of an independent, non-franchised woman owned real estate services business, Zoriana Real Estate Network, Ltd., Oak Forest, IL. Zoriana graduated from Loyola with a Bachelor of Science in Psychology and a Bachelor of Arts in Speech and Drama and attended the prestigious Harrington Institute of Interior Design. She is a member of NAR, IAR, REBAC, Realtor® Association of the West/South Suburban Chicagoland, OREP, Appraisal Institute (Residential Associate) and NAIFA (Candidate). E-mail Zoriana at zoriana_re@hotmail.com or visit http://www.ZorianaRealEstate.com or http://www.HomeSweetDeal.com.

Published: June 23, 2004

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