Legislative Information
Letter from Sponsoring Organizations to Increase
Minority Homeownership
June 17, 2002
President George W. Bush
The White House
Washington, DC 20500
VERSION INCORPORATING CHANGES FROM THURSDAY, 2/14
The undersigned organizations have joined together to narrow
to increase minority the homeownership gap between minorities
and white families rate for minorities. Through a combined effort
of the public and private sectors, we are committing to a collaboration
to increase the number of minority homeowners by at least 5.5
million additional households over this decade, a goal
that will require a concerted effort by the private and public
sectors. Our success at this goal will mean increasing the overall
homeownership rate among minorities to more than 52 percent, an
increase of more than 10 percent from current levels.
Over the last 10 years minorities especially have experienced
a rapid increase in their homeownership rates. Fully XX percent
Fully 40 percent of the overall growth in homeownership in the
last decade is directly because of rapid increases in the numbers
of new minority homeowners. Education, outreach, lower costs,
improved marketing, diversity training, and innovation within
the mortgage and homebuilding industries, along with federal community
reinvestment and fair lending laws, have opened up the housing
market to previously underserved borrowers populations in an unprecedented
way. But the gap that remains is still too large, and there are
further gains that can be made with a renewed commitment by the
industry and government at all levels.
Homeownership is not the only housing choice for American families,
and affordable rental housing is also an important part of any
successful national housing policy effort. But homeownership is
the single most important component of household wealth in the
United States, and is fundamental to strong communities. Many
families, including especially minority families, have a strong
desire to own a home. While not all the disparity can be attributed
to differences in income and wealth, many families but have lacked
the means to achieve their piece of the American dream.
Our effort is a commitment to break down barriers, increase financial
and homeownership education and support, and insure that there
is capital and access to it for everyone who seeks to own their
own home.
There are perceived and real and significant barriers facing
many families, and especially minorities. These include:
- Community perceptions regarding affordable housing
- Wealth a lack of adequate assets for down payment and closing
costs
- Income too little income to afford the cost of a home
- Credit History problems a lack of a credit history on which
future lending judgments can be made, or weak credit histories
caused by excessive and/or bad debts, or a lack of a credit
history on which future lending judgments can be made
- Lack of information about homeownership, homeownership opportunities
and the home buying and mortgage process
- Lack of access to affordable mortgage credit, and predatory
practices by some lenders
- Language barriers especially among recent immigrants, one
of the fastest growing segments of the population with a strong
desire for homeownership
- Lack of inventory of affordable housing in a diverse range
of communities
- Community perceptions regarding affordable housing
- Discrimination perceived and real
We see opportunities to build on the current efforts in which
many of us are engaged to help build even more momentum for minority
homeownership and to attack these obstacles. Success in this endeavor
will mean more opportunity, more ability to build equity and wealth
that can be used for education and other important family investments,
more stable neighborhoods and a stronger country. The key areas
in which we will focus are:
- Supplying adequate amounts of capital to fuel continued homeownership
growth. This includes the primary mortgage market, which deals
directly with consumers; the secondary mortgage market, including
Fannie Mae, Freddie Mac as well as the Federal Home Loan Banks,
whose role is to insure a reliable and steady supply of capital
to the primary market.
- Production and rehabilitation of affordable homes, particularly
in those communities and neighborhoods where the existing supply
is inadequate or inappropriate, or where historic patterns of
disinvestment have created new opportunities to take vacant
or underutilized land and convert it to new homeownership opportunities.
- Innovation in mortgage products.
- Effective marketing to minority communities to insure the
availability of a full range of mortgage products and housing
opportunities.
- Outreach and financial and homeownership education to increase
peoples ability to navigate the system, and to continue to
build awareness of the opportunities for homeownership and the
requirements that people must be prepared to meet to succeed.
- Fostering community based communication and cooperation, especially
among members of the housing industry, community organizations
and local government support in connecting people to each other
and to resources in the community.
Effective public policies that will expand and enhance opportunities
are necessary to this effort, such as the Single-Family Affordable
Housing Tax Renewing the American Dream Tax Credit
Credit proposed by President Bush; the Federal Housing Administration,
the HOME Investment Partnerships program, downpayment assistance
grants, USDA/Rural Housing Service Section 502 loans, housing
counseling grants, and Section 8 homeownership assistance; IDA
savings accounts, First Accounts and CDFIs. . Federal, state and
local governments all have a role to play in insuring a policy
climate that supports and sustains homeownership growth.
Capital is necessary to fuel continued homeownership growth. This
includes the primary mortgage market, which deals directly with
consumers; the secondary mortgage market, including Fannie Mae,
Freddie Mac; as well as the Federal Home Loan Banks, whose role
is to insure a reliable and steady supply of capital to the primary
market.
- Production of affordable homes, particularly in those communities
and neighborhoods where the existing supply is inadequate or
inappropriate, or where historic patterns of disinvestment have
created new opportunities to take vacant or underutilized land
and convert it to new homeownership opportunities.
Each of our organizations has pledged specific actions to support
this initiative, in addition to activities in which we are already
engaged. These are listed separately on the attached document.
In particular, a serious effort to expand minority homeownership
will require a concerted outreach and education campaign at both
the national and local levels to raise both awareness and preparedness
among potential buyers. This effort will rely heavily on facilitating
coordination at the local level among the partners in both the
public and private spheres. The White House has a special opportunity
to play a key coordinating and promotional role at the local level
by national partners. In addition to continued support for housing
programs, the White House can It can help build and maintain momentum
around this effort through:
- Participation in and sponsorship of activities such as a special
White House Conference on Homeownership, and assigning lead
responsibility for this effort to a Cabinet level appointee,
such as the HUD Secretary;
- Working together in cities around the country to expand outreach,
highlight public and private efforts and to help draw partners
together into local efforts;
- Strong support of the Renewing the Dream Tax Credit;
continued promotion of significant increases in budget authority
for housing production and counseling, incremental Section 8
vouchers, particularly to underwrite downpayment and mortgage
costs; First Accounts, and IDA savings for homeownership.
- Expanded use of volunteers through AmeriCorps to help community
based and faith-based efforts to expand homeownership, particularly
among minorities
- Ensuring a regulatory climate that fosters homeownership but
also protects consumers against fraud and predatory practices;
and
- Its participation in and sponsorship of activities such as
a special White House Conference on Homeownership, and assigning
lead responsibility for this effort to a Cabinet level appointee,
such as the HUD Secretary;
- by sponsoring and participating working together in events
in cities around the country to expand outreach, highlight public
and private efforts and to help draw partners together into
local efforts;
- by Funding important research through HUD and other agencies.;
and
- by insuring a regulatory climate that fosters homeownership
but also protects consumers against fraud and predatory practices.
Expanded use of volunteers through AmeriCorps to help community
based and faith-based efforts to expand homeownership, particularly
among minorities.
- Strong support of the Renewing the American Dream Tax
Credit; continued promotion of significant increases
in budget authority for housing production and counseling, incremental
Section 8 vouchers, particularly to underwrite downpayment and
mortgage costs; First Accounts, and IDA savings for homeownership.
An important A critical next step in this process is to recruit
participation from additional organizations, particularly those
representing state and local governments, community based organizations
working directly with targeted consumers, lenders, and faith based,
civil rights, and other institutions that are trusted advisors
in these communities.
Sponsoring Organizations (in alphabetical order)
The Enterprise Foundation
Fannie Mae
Federal Home Loan Banks
Freddie Mac
Local Initiatives Support Corporation
National Association of Homebuilders
National Association of Realtors
Neighborhood Housing Services of America
Neighborhood Reinvestment Corporation
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