Feature Week of June 6, 2004
JUNE IS HOMEOWNERSHIP MONTH
Are you among the 33 percent of Americans that rent your housing? Fifteen percent of Americans live in an apartment home. African Americans have the lowest homeownership rates in the country and should, especially, be taking construction steps toward building wealth in America: homeownership.
Lately, millions of blacks have abandoned renting, increasingly buying into the American Dream: homeownership. During the 1990s, minorities bought homes at rates four times faster than it was for whites. In 2004, 48 percent of African Americans are homeowners. However, black homeownership lags behind the 67 percent national rate, and the 73 percent rate for white families.
Homeownership is the foundation of Americans’ wealth. White Americans own the bulk of the nation’s wealth and build that wealth by owning property which they’ve used for other investments. Of the $44.3 trillion in assets held by whites in 2001, 43 percent were financial assets including stocks, bonds and other liquid investments. In contrast, of the $1.4 trillion in assets held by blacks, 42 percent were held in their homes while only 33 percent were held in financial assets. Since the nation’s inception, home and property ownership have provided wealth that was passed on to their children and has been the primary investment vehicle people have used to go into business and gain greater wealth.
One in four of today’s African-American renters say buying a home is their number one priority. Two in five blacks say they are “very” (31%) or “fairly” (11%) like to buy a home in the next three years. So, Homeownership Month is a good time to gather facts and momentum toward getting into a home of your own. It’s a 30-day national effort to provide important home buying information and financial tools to families, particularly minorities. In June 2002, President Bush issued The Homeownership Challenge to close the “homeownership gap” by adding 5.5 million minority homeowners by the end of the decade. In conjunction with that, more than two dozen organizations are working to create more than $1 trillion in mortgage financing for minority homebuyers.
The Bush Administration’s African American Secretary of Housing and Urban Development introduced Homeownership Month 2004 with a deal to provide first-time home buyers access to $161.5 million , over the next year, to help with down payments and closing costs. "Homeownership is extremely important, and it has long been the American Dream," says HUD head, Alphonso Jackson. "Many of our forefathers came to America because there was a basic principle: They got to own something that was theirs. We're just carrying forward that legacy."
The money will be given out by state and local governments under the American Dream Downpayment Act President Bush signed into law in December. It will be available in grants of $10,000, or 6 percent of the home's purchase price if it is greater, to people earning less than 80 percent of their area's median income. This is the first federal block-grant program to aid first-time home buyers, but it is not the first program to reduce down payments. For example, Fannie Mae, a government-chartered company that buys mortgages and encourages homeownership, has a program that allows for down payments as low as $500 and considers "nontraditional" credit histories. It also has a program in which “credit impaired” people can reduce interest rates by making payments on time as well as other incentives to encourage mortgage lenders to "reach out" to low- and moderate-income borrowers.
The Congressional Black Caucus Foundation (CBCF) launched "With Ownership, Wealth" (WOW) in 2001 to promote African American homeownership. A number of trade associations, community based organizations and housing and financial services companies have joined with the CBCF in the WOW effort in outreach programs to African American communities through homeownership fairs; black-oriented radio and newspaper media campaigns; community-based partnerships; seminars for potential home buyers; one-on-one credit counseling service; access to city and state funds for down payment and closing cost assistance; and in-depth information about the best mortgage financing options available through the participating lenders.
For HUD and WOW programs contact: The National Association of Realtors, 430 North Michigan Avenue, Chicago, IL 60611, their DC Office: 700 Eleventh Street, NW, Second Floor, Washington, DC 20001, 1-800-874-6500. The Congressional Black Caucus Foundation (CBCF): 1720 Massachusetts Avenue, Northwest Washington, DC 20036, 202.263.2800 and firstname.lastname@example.org.
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