To determine where the presidential candidates stand on a broad range of housing issues, and issues that impact housing, the National Association of Home Builders and the National Association of Realtors submitted a series of questions to President George W. Bush and Massachusetts Senator John F. Kerry. The candidate's responses were initially made to the two group's respective membership, and are being reproduced by Realty Times this week as a public service .

Today, Pres. Bush and Sen. Kerry's responses to the 225,000-member NAHB, which published the following Q&A in the Aug. 30 edition of Nation's Building News, the trade organization's official online newspaper.

Question: Housing has been a major contributor to the nation's economic growth in recent years. Looking ahead, how critical is housing's performance to the nation's economic recovery? What specifically would you do to ensure that housing production and home sales continue to lead the economy forward?

PRESIDENT BUSH: America's economy is strong and getting stronger. In three short years, we have turned recession into recovery and moved into robust economic growth. Since August 2003, the economy has added nearly 1.5 million new jobs. And with interest and inflation rates low and consumer confidence high, our economy is the fastest growing of any major industrial country in the world.

Home ownership rates have soared to record levels in recent months, further evidence of a growing economy. By lowering taxes and laying the foundation for companies to create new jobs, we are contributing to the strength of the housing market and the economy as a whole. Tax relief has left Americans with more money to put toward buying a home or paying the monthly mortgage. In addition, I have pursued an aggressive home ownership agenda that includes the goal of creating 5.5 million new minority home owners by the end of the decade through a variety of proposals to assist low- and moderate-income families.

To meet this goal, I signed into law the American Dream Downpayment initiative, which authorizes $200 million a year to assist an estimated 40,000 low-income families with downpayment funds. In this year's budget, I proposed the Zero Downpayment Initiative, which would eliminate the statutory requirement of a minimum 3% downpayment for Federal Housing Administration (FHA)-insured single-family mortgages for first-time home buyers. Preliminary projections indicate that the new FHA mortgage product would generate about 150,000 home buyers in the first year alone. I also proposed to triple funding for self-help programs that offer home ownership opportunities to families willing to contribute their own "sweat equity," and I have increased funding for housing counseling programs.

To increase the supply of affordable housing, I proposed a $2.54 billion, five-year Single-Family Affordable Housing Tax Credit for up to 50 percent of the project costs of rehabilitation and construction of affordable homes, provided they are offered to home buyers with incomes of not more than 80% of area median income. The tax credit would eventually result in an additional 200,000 affordable single-family homes becoming available through construction or rehabilitation.

When I launched my Home Ownership Initiative, I challenged the entire real estate and mortgage finance industry to do their part to help close the gap that exists between the home ownership rates of minorities and non-minorities. In response, more than two dozen industry leaders made commitments to help achieve this goal.

My initiative is producing results. The latest Census estimate of the number of minority home owners is 1.6 million higher than it was when the initiative was launched. And homeownership rates are at record levels. Overall home ownership reached a record 69.2% in the second quarter of 2004, while minority home ownership is at a record high of 51%.

With more Americans employed and able to take advantage of home-buying opportunities, the housing market should remain a key contributor to America's strength and prosperity.

SENATOR KERRY: Housing has been a pillar of strength for our economy, even while many other industries have been experiencing difficulties. We must ensure that our housing sector remains strong while we work to create new jobs and growth in our economy.

As Ranking Member of the Senate Banking Committee's Housing Subcommittee for a number of years, and as a current member of the Senate Finance Committee, I understand the important role housing plays in developing our economy. That is why I have worked to promote the whole spectrum of housing opportunities, including: the preservation of existing affordable housing; the construction of new affordable housing; protecting and expanding the Low Income Housing Tax Credit; introducing legislation to increase home ownership through the rehabilitation of existing homes and the construction of new homes; protecting and expanding the multifamily and single-family FHA programs; and producing elderly and assisted housing.

John Edwards and I will strengthen the economy while keeping interest rates lower by restoring fiscal discipline and putting sound economic policies in place. Our plan will help encourage home ownership and result in a sustainable boost to the housing market.

Question: Creating and maintaining a finance system that provides an ample supply of mortgage credit at affordable prices has always been one of the cornerstones of this nation's housing policy. How would you describe Fannie Mae's and Freddie Mac's role in the development of a strong secondary mortgage market, and what value have Fannie and Freddie added to today's housing finance system?

KERRY: Fannie Mae and Freddie Mac have played a critical role in the development of both the rental and home ownership markets in the United States. These institutions have helped millions of Americans achieve the dream of home ownership, raise their standard of living, increase their savings and build wealth. Moreover, the United States has the deepest, most liquid mortgage markets in the world. Despite a number of crises in international capital markets over the past several years, there has never been a lack of mortgage credit, thanks in large part because of the role played by the government sponsored enterprises (GSEs). The predominance of the 30-year, fixed-rate, pre-payable mortgage is a tribute to the importance of the housing GSEs in our marketplace. Very few consumers outside the United States have access to such mortgage products.

BUSH: Government sponsored enterprises (GSEs), such as Fannie Mae and Freddie Mac, and the Federal Home Loan Banks, make important contributions to the strength and resilience of the U.S. housing markets. The GSEs leading role in the development of the secondary mortgage markets has helped make home ownership a reality for more Americans.

Question: Following up on that question, where do you stand on the debate over how best to regulate Fannie Mae and Freddie Mac?

BUSH: Government Sponsored Enterprises' Fannie Mae, Freddie Mac and the Federal Home Loan Banks are important players in the U.S. economy. They are in need, however, of a regulatory structure that is worthy of their considerable size, complexity and importance. And they must remain focused on their special public mission. My Administration is committed to GSE reform consistent with these twin goals: increasing home ownership opportunities for low and middle-income Americans and ensuring the long-term strength and resiliency of the housing finance system.

I have called on Congress to create a new regulatory regime that establishes a single financial regulator with the full range of supervisory and enforcement powers that are comparable to other world-class financial regulators. For example, a strong and effective regulator must have the authority to review new and ongoing activities being undertaken by the GSEs. In addition, the regulator should have authority to establish appropriate capital requirements to ensure long-term safety and soundness, and must have the necessary tools to deal with a GSE that encounters significant financial or management difficulties.

My Administration is committed to ensuring that the GSEs are strong and serve their public mission of promoting home ownership. The American people deserve no less.

KERRY: I support maintaining the GSEs' government-sponsored status because housing holds a special place in both our economic and social policy in this country. I am, however, concerned about recent governance and accounting problems at Freddie Mac. I would work with Congress and the top experts to carefully examine these issues and develop legislation that provides for strong, effective supervision and regulation of government sponsored enterprises within a framework that assures their safety and soundness. We must also increase the focus of GSEs on affordable housing. This will help expand home ownership in the future and ensure the continued strength of the home mortgage market in the United States.

Published: September 13, 2004

Use of this article without permission is a violation of federal copyright laws.