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Special Reports
Downpayment Assistance Programs
Promoting Products, DPA Options and AH in June
'Homeownership is good for our communities.'
By Amilda Dymi
The "National Homeownership Month" was celebrated around the
country by promoting new products, downpayment assistance options and other housing events.
The Housing and Urban Development launched a month-long campaign that aims "to build on President Bush's commitment
to expand homeownership opportunities for all Americans," HUD said.
During the month of June HUD focused on efforts to modernize Federal Housing Administration programs that help
secure homeownership for first-time homebuyers.
To facilitate homeownership, HUD is reforming FHA so it is more affordable and flexible enough to provide mortgage
insurance and other loan services that help underserved and minority homebuyers.
For example, HUD said, reducing the minimum cash contribution for an FHA loan would allow 500,000 additional renters
to become homeowners, of whom 22% would be African American or Hispanic. More relaxed FHA credit standards for
borrowers who could make a 10% cash downpayment would help an additional 1.1 million renters become homeowners,
26% of whom would be African American or Hispanic. Also, FHA reforms would allow the number of FHA-insured mortgages
to double in six years.
Related efforts include: The American Dream Downpayment Initiative, through which HUD has made $236 million available
to more than 400 state and local governments across the country since 2003, also helping 15,500 first-time homebuyers.
Another $1.9 billion has been approved for the HOME Investment Partnerships Program to be allocated to over 600
state and local governments. Fiscal Year 2007 Budget provides $44.55 million to help 600,000 homebuyers receive
counseling services.
"HUD is beginning a month-long nationwide campaign to help more families
turn this dream into a reality," HUD Secretary Alphonso Jackson said. "Homeownership is good for our
communities and great for our economy."
At homeownership fairs and other events planned throughout June HUD officials will meet with prospective homebuyers
to deliver homeownership information, discuss the wealth-building role of homeownership and its role in strengthening
communities.
Currently the national homeownership rate is at 68.5%, and 50% for minority families. In June 2002 President Bush
challenged the nation to close the minority homeownership gap and create 5.5 million new minority homeowners by
2010. Since, HUD said the Census Bureau reports that more than 2.5 million minority families have already taken
out a mortgage on a new home.
Also celebrating homeownership NeighborWorks America and E*Trade Financial Corp. launched the "Keys to My
Home" website (www.keystomyhome.org) designed to assist customers better understand the homebuying process.
The new bilingual site offers user-friendly tips and information homebuyers need to prepare for and maintain homeownership
in the long run, as well as customized budget tables that are flexible enough to fit the unique needs of each consumer.
It is one of three public education initiatives jointly supported by ETF and NeighborWorks.
The new website is "the perfect blend of technology and a human touch," said NeighborWorks CEO Ken Wade.
"Too often homebuyers feel rushed and forced to make decisions without thoroughly evaluating their own financial
positions and the options available to them."
Tools and resources include information about how to become homeowners, "the top 10" questions borrowers
should ask lenders, what kind of home insurance is really necessary to obtain, data on mortgage loan affordability,
debt calculators and a mortgage comparison worksheet. Most of the information provided is modeled after "Realizing
the American Dream," a curriculum developed and used by NeighborWorks Center for Homeownership Education and
Counseling. A Spanish version of the curriculum will be available later in the summer.
In addition, ETF and NeighborWorks are in the process of launching neighborhood-based computer labs, or "homebuyer
kiosks," in target minority and low- to moderate-income markets to provide community development educational
seminars through the NeighborWorks Training Institute.
The first four kiosks will be installed this summer in California. By the fall of 2007, a total of 16 kiosks will
be installed in some of the nation's most underserved communities in San Diego, Calif., Phoenix, Ariz., Brooklyn,
N.Y., and Chicago, Il. Based on the increasing need, NeighborWorks expects to continue expanding the kiosk locations.
According to NeighborWorks the "homebuyer kiosks" developed by NeighborWorks and sponsored by ETF will
address "many of the critical homeownership challenges facing underserved minority- and low- to -moderate-income
markets," such as lack of Spanish language information about home buying and mortgage financing, cultural
barriers, and credit history issues.
The kiosks will deliver easy-to-follow Web-based information about housing in several languages. Consumers will
be linked to homebuyer fair schedules, innovative and affordable loan products, Realtors, multiple listing services,
insurance products, home inspection services and more.
NeighborWorks provides financial support, technical assistance and training for communities nationally through
a network of over 245 community development organization serving over 4,400 urban, suburban and rural communities.
NeighborWorks has generated over $10 billion in reinvestment.
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