Bringing Homeownership Rates to Historic Levels

"There is no more crucial building block for a strong community and a promising future than a solid home."

President Clinton, Pine Ridge Indian Reservation, July 7, 1999


Making the Dream of Homeownership a Reality

Highest Homeownership Rate in History. The Clinton-Gore Administration is dedicated to making the dream of homeownership a reality for all Americans. In 1995, the Administration began an unprecedented partnership with more than 50 key public and private sector organizations to form a National Homeownership Strategy with the goal of helping more Americans become homeowners. The homeownership rate reached 67.2 percent in the second quarter of 2000, the highest ever recorded. In contrast, the homeownership rate fell from 65.6 percent in the first quarter of 1981 to 63.7 percent in the first quarter of 1993. There are almost 9 million more homeowners than in 1993. [FY 2001 Budget, p. 127; Department of Housing and Urban Development]

Lowering Interest Rates by Paying Off the National Debt. Debt reduction brings real benefits for the American people -- a family with a home mortgage of $100,000 might expect to save roughly $2,000 per year in mortgage payments. Reduced debt also means lower interest rates and reduced payments on car loans and student loans. The Clinton-Gore Administration has eliminated the $290 billion budget deficit, produced three back to back budget surpluses and paid off $360 billion of the national debt in the last three years. Public debt is $2.4 trillion lower in 2000 than was projected in 1993. With the President's plan, we are now on track to eliminate the nation's publicly held debt by 2012.

Record Levels of Homeownership Assistance. In the early 1990s, the Federal Housing Administration (FHA) was losing money and near bankruptcy. Today, FHA and its Mutual Mortgage Insurance Fund are healthier than ever, with a March 2000 actuarial review showing that the total value of the Fund in FY 1999 was more than $5 billion above previous estimates. FHA is one of the country's leading providers of single family mortgage insurance. Many homebuyers are unable to qualify for mortgages without FHA insurance. In 1999, FHA insured more than 1.3 million loans representing a record $124 billion in insurance authority -- more insurance commitments than any other year in history. Eighty percent of FHA loans go to first-time homebuyers and FHA insures about 40 percent of all home mortgages to African American and Hispanic homebuyers. In January 2000, FHA began insuring larger home mortgage loans across the country -- up to nearly $220,000 in some areas for single-family homes. [William Apgar, Assistant Secretary for Housing/FHA Commissioner, Testimony before the House Subcommittee on Housing and Community Opportunity, 9/15/99; HUD Press Release, 1/5/00]

Building New Homes. In February 1999, HUD, the National Association of Home Builders, and the U.S. Conference of Mayors signed a Memorandum of Understanding agreeing to work together to build an additional one million new homes over the next 10 years in cities all across America.

Helping Renters Buy Their First Home. The President and Vice President created a homeownership voucher program in 1999 that will allow 50,000 families to use their Section 8 rental assistance vouchers to become first-time homebuyers. Under the new program, the same HUD funds helping pay a family's rent will instead be used for the family's monthly mortgage payments.

Providing Incentives to Save for a Home. President Clinton signed legislation creating Individual Development Accounts, providing incentives through federal matching funds for low-income families to save for a first home, higher education, or to start a new business, a key part of his 1992 community empowerment agenda. In FY 1999, $10 million was awarded to establish savings accounts for over 10,000 low-income workers in 40 communities, and an additional $10 million will be awarded in FY 2000. The President's budget provides $25 million for IDAs to create over 20,000 new accounts in FY 2001.

Protecting Senior Citizens from Mortgage Fraud. HUD ended a scheme by con artists that victimized senior citizen homeowners by charging thousands of dollars in unnecessary fees for reverse mortgages. Reverse mortgages allow older people to borrow against the value of their homes.

Doubling the Number of Fair Housing Enforcement Actions. To respond to the increase in reported cases of serious fair housing violations, HUD has committed $37 million to 67 fair housing centers around the country to assist in fighting housing discrimination. In FY 2000, the President won $44 million to fight housing discrimination, which includes $6 million to continue the audit-based fair housing enforcement initiative started last year. The audit will include 3,000 to 5,000 tests for housing discrimination. HUD will provide funds to local non-profit groups and enforcement agencies to monitor and act against housing discrimination. The Clinton-Gore Administration filed 3,660 cases between 1993 and June 2000 to enforce fair housing laws -- more than any other Administration, with double number the cases in the President's second term than in the first. For instance, the Administration desegregated a Vidor, Texas, public housing complex and ordered a Mississippi bank to implement remedial lending plans for minority customers who were unfairly denied loans by the bank.

Producing More Affordable Housing for All Americans

Working to Increase the Low-Income Housing Tax Credit. Since its creation in 1986, the Low-Income Housing Tax Credit (LIHTC) has given states tax credits of $1.25 per capita to allocate to developers of affordable housing. While building costs have increased 40 percent in the last decade, the amount of the credit has not been adjusted for inflation. President Clinton and Vice President Gore have proposed to increase the cap on the LIHTC from $1.25 per capita to $1.75 per capita restoring the value of the credit to its 1986 level and helping to create up to 180,000 new low-income rental housing units over the next five years.

Creating More Affordable Housing with the HOME Program. The HOME Investment Partnerships Program provides more than $1 billion a year to create affordable housing for low-income households. HUD provides funds to State and local governments to strengthen public-private partnerships and to expand the supply of decent, safe, sanitary, and affordable housing, with primary attention to rental housing, for very low-income and low-income families. HOME's flexibility empowers people and communities to design and implement strategies tailored to their own needs and priorities. As of June 2000, HOME has provided 325,547 housing units -- an average of 40,000 units a year. President Clinton's FY 2001 budget includes $1.65 billion for this program. [Department of Housing and Urban Development; HUD Press Release, 2/7/00]

Addressing the Problems of Homelessness. President Clinton and Vice President Gore have been committed to helping homeless Americans become more self-sufficient. The Department of Housing and Urban Development alone has invested nearly $5 billion in programs to help homeless people since 1993 -- more than three times the investment of the previous Administration. The Administration's Continuum of Care approach has helped more than 300,000 homeless people get housing and jobs to become self-sufficient. The Continuum of Care made clear that homelessness was more than simply a housing problem, and focused attention on long-term solutions which included housing as well as job training, drug treatment, mental health services, and domestic violence counseling. President Clinton won a record $1.02 billion for the program in FY 2000 -- a $45 million increase from the previous year, and has proposed $1.2 billion in FY 2001. This includes $105 million for rental assistance vouchers to help the homeless move to permanent housing with supportive services. The Clinton-Gore Administration is also proposing to expand access to mainstream health, social services, and employment programs for which the homeless may be eligible through a new $10 million program administered by the Department of Health and Human Services, States, and large counties. [Fred Karnas, Jr., Deputy Assistant Secretary for Special Needs Programs, HUD, Statement before the House Veteran's Affairs Subcommittee on Oversight and Investigation, 6/24/99]

Helping to Ensure People with HIV and AIDS Have Access to Housing. President Clinton and Vice President Gore have worked to ensure that people with HIV and AIDS have fair access to housing. The Department of Housing and Urban Development has established the National Office of HIV/AIDS Housing to help people with HIV/AIDS pay for housing. Funding for the Housing Opportunities for Persons with AIDS program is more than four times larger now than in 1993. In December 1998, the Vice President announced the release of $200 million to help communities prevent people with HIV/AIDS and their families from becoming homeless. In addition, HUD and HHS have launched collaborative efforts to combine housing assistance, medical and social services for people living with HIV/AIDS, including testing outreach programs and other special efforts for people with multiple diagnosis. In 1999, HOPWA provided housing assistance for 41,500 households and over 51,000 persons with HIV/AIDS and their families. [Department of Housing and Urban Development]

Helping Individuals with Disabilities Transition into Community-Based Settings. In July 2000, Vice President Gore announced that the Departments of Health and Human Services and Housing and Urban Development will commit to a new investment, subject to appropriations, of nearly $20 million over five years in a public-private partnership with the National Project on Self-Determination entitled Access Housing 2000. This effort will focus on expanding the availability of accessible, affordable housing to individuals with disabilities who have very low incomes and who currently reside in nursing homes, their parents' homes, and other community-based residential programs. The project will begin with approximately 400 beneficiaries, with a goal of reaching 2,000 persons at full implementation.

Providing Housing Assistance to Native Americans. The Native American Housing Assistance and Self-Determination Act of 1996 gives Indian Housing Block Grants to Indian tribes and Alaska Native villages or their Tribally Designated Housing Entities, providing communities with more flexibility than ever before to plan and develop programs that best meet locally determined needs for housing assistance. In FY 2000, $620 million the Administration's full request -- is available to tribes for IHBG assistance; in FY 2001, the President is requesting $650 million.

Transforming Public Housing

Reforming the Public Housing System. The Clinton-Gore Administration is implementing the most far-reaching changes in public housing in decades by demolishing the worst housing developments, cracking down on bad management, rewarding residents who work and cracking down on crime. President Clinton enacted reforms in 1998 to reduce segregation in public housing by race and income, encourage and reward work, bring more working families into public housing, and increase the availability of subsidized housing for very poor families. In addition, the new public housing law is helping to improve living conditions and reduce crime in public housing.

HOPE VI: Revitalizing Public Housing. HOPE VI was developed in 1993 as a result of recommendations from the National Commission on Severely Distressed Public Housing. The Commission recommended revitalization in three general areas: physical improvements, management improvements, and social and community services to address resident needs. The Clinton-Gore Administration will approve the demolition of an unprecedented 100,000 severely distressed public housing units by Fall 2000 and rebuild them with lower-density, townhouse-style developments which can serve as anchors for neighborhood renewal. To date, HUD has demolished over 47,000 units between the HOPE VI and Public Housing Capital programs. HUD has awarded $3.54 billion in grants to spur economic development and change the shape of 85 public housing developments nationwide.

Bringing Computers to Public Housing Neighborhoods Across the Country. The Clinton-Gore Administration has created more than 800 Neighborhood Network learning centers, which are innovative public/private partnerships that bring state of the art technology to public housing across America and help people learn critical computer skills. Neighborhood Networks throughout the nation are working with community partners to help low-income residents bridge the digital divide, open doors to economic and educational opportunities and improve their lives and communities. For example, since opening in May 1996, the Versailles Arms Computer Learning Center in New Orleans has helped more than 100 residents secure jobs after completing computer training.

Transforming Public Housing Developments into Campus of Learners. President Clinton's Campus of Learners Initiative provides public housing residents with an opportunity to live in a college-like setting that is focused on learning. The initiative will transform selected public housing projects in cities across the nation into campuses where every resident is pursuing educational opportunities. Public housing authorities use private- and public-sector resources to provide job training, education, and employment opportunities public housing residents. This initiative is part of the Clinton-Gore Administration's larger effort to transform public housing and stimulate welfare reform.

Housing Vouchers for Hard-Pressed Working Families. President Clinton has secured 110,000 new housing vouchers in the last two years to help welfare recipients and hard-pressed working families move closer to job opportunities. This year, he is proposing $690 million for 120,000 new housing vouchers to subsidize the rents of low-income Americans and enable them to move closer to job opportunities. Of the 120,000 new vouchers, 32,000 will be targeted to families moving from welfare to work, 18,000 to homeless individuals and families, and 10,000 to low income families moving to new housing constructed through the Low Income Housing Tax Credit, with the remaining 60,000 vouchers allocated to local areas to help address the large unmet need for affordable housing.

Revitalizing Our Nation's Communities

Encouraging Investment in Underserved Communities with the New Markets Initiative. President Clinton's New Markets Initiative will help bring economic development and renewal to communities that have not benefited from the soaring economy by spurring more than $22 billion in new investment in urban and rural areas. On July 25, 2000, the House passed the President's New Markets Initiative in a historic bipartisan agreement that included extension and expansion of Empowerment Zones, and an increase in the Low Income Housing Tax Credit. The President has taken three New Markets Tours of underserved communities, which have helped generate more than $1 billion in private sector investment commitments.

Expanding High-Speed Internet Access. President Clinton's third New Markets tour highlighted the importance of closing the digital divide and bringing the benefits of technology to underserved communities. High-speed Internet access is becoming as important to the economic vitality of a community as roads and bridges are today, allowing people to upgrade skills using distance learning and helping businesses communicate electronically with customers and suppliers. The President's FY 2001 budget includes a new $25 million program at the Departments of Commerce and Agriculture to accelerate private sector deployment of broadband networks in under-served urban and rural communities -- using grants and loan guarantees.

Expanding Investment in Urban and Rural Areas. Spurring economic development in distressed communities, the Clinton-Gore Administration has created 31 Empowerment Zones and more than 100 Enterprise Communities, including 50 rural ECs, which are creating new jobs, new opportunities and stronger communities. This would have a dramatic effect in the areas with high unemployment, weak economies, shortages of affordable housing and other problems. The President won $70 million in funding for Rural and Urban Empowerment Zones in FY 2000 -- after Congress initially provided no funding. On July 25, 2000, the House passed a bipartisan agreement that would extend and expand the incentives in the existing EZs, as well as create nine new Round 3 Empowerment Zones. The Administration's agreement with Speaker Hastert also includes a first-time commitment for additional funding for Round 2 EZs.

Expanding Access to Capital through Community Development Financial Institutions (CDFI). Proposed and signed into law by the President in 1994, the CDFI Fund is helping to create a network of community development financial institutions in distressed areas across the United States through grants, loans and equity investments. In FY 1999, funding was increased 19 percent to $95 million, and President Clinton successfully worked to maintain that investment in FY 2000. In FY 2001, the President is proposing $125 million.

Strengthening Community Reinvestment. In November 1999, President Clinton enacted financial modernization legislation, which also included provisions to guarantee that our financial system will continue to meet the needs of underserved communities. Under the law, banks cannot expand into activities such as securities or insurance underwriting unless they can demonstrate that they are meeting the credit needs of all the communities they serve, including low- and moderate-income communities. The law also provides additional support for grass-roots community development by authorizing a new Program for Investment in Microentrepreneurs (PRIME), to provide business advice to low- income microentrepreneurs. [White House, Office of the Press Secretary, 11/12/99]

Creating Livable Communities. President Clinton and Vice President Gore have proposed an extension of their Livable Communities initiative, which expands the choices available to communities to ensure a high quality of life and strong, sustainable economic growth. As part of this initiative, the Clinton-Gore Administration has proposed record funding for public transit and other programs to ease traffic congestion while reducing air pollution; matching grants to help neighboring communities develop "smart growth" strategies; and funding to provide communities with new information tools, and improve public safety by sharing crime data. The President also proposed tax credits for Better America Bonds, a new financing tool generating billions in bond authority for investments by state, local and tribal governments to preserve green space, protect water quality, and clean up abandoned toxic waste and industrial sites.

Creating New Tools to Help Families Move from Welfare to Work. Since enactment of the 1996 welfare reform law, millions of families have moved from welfare to work. With the President's leadership, the 1997 Balanced Budget Act included $3 billion to move long-term welfare recipients and low-income non-custodial fathers into jobs. To fully implement this initiative, the President's FY 2001 budget allows grantees an additional two years to spend Welfare-to-Work funds. It also proposes $255 million for Fathers Work/Families Win grants to promote responsible fatherhood and support working families. The Welfare-to-Work Tax Credit provides tax incentives to encourage businesses to hire long-term welfare recipients. The President's Access to Jobs initiative helps communities design innovative transportation solutions, such as van services, to help former welfare recipients and other low-income workers get to work, and this year the President is proposing $150 million for this initiative, double last year's level. In addition, the President is seeking to make it easier for low-income families to own a reliable car that can get them to work by allowing families to use Individual Development Accounts to save for a car and by allowing states to conform their food stamps vehicle policy with a more generous TANF vehicle policy.

Promoting Community Revitalization. Community Development Block Grants (CDBG) promote community revitalization throughout the country, providing annual grants to more than 900 metropolitan cities and urban counties. CDBG funds are used for a wide range of community development activities directed toward neighborhood revitalization, economic development, and improved community facilities and services. Section 108 enables States and local governments participating in the CDBG program to obtain federally guaranteed loans that can help fuel large economic development projects and other revitalization activities. President Clinton gave $431 million to Section 108 funds in the FY 2000 budget.

Accelerating Toxic Cleanups and Brownfields Redevelopment. The Clinton-Gore Administration has completed clean up at more than 525 Superfund sites, more than three times as many as completed in the previous twelve years. Clean up of more than 91 percent of all sites is either completed or in progress. The Administration has leveraged nearly $1 billion in private sector investment for Brownfields redevelopment. The Administration also signed into law the Brownfields Tax Incentive to lower the short-term costs of brownfields clean-up.

Lowest Overall Crime Rate in 25 Years. Under the Clinton-Gore Administration, America has experienced the longest continuous drop in crime on record. Violent crime rate fell 7 percent in 1999 and 27 percent since 1993. The murder rate is down more than 25 percent since 1993, its lowest point since 1967. The overall crime rate is the lowest in 25 years. This is the eighth consecutive year serious crime has declined nationwide. President Clinton and Vice President Gore have put 100,000 additional police on the streets through the COPS program, and more than 536,000 felons, fugitives and domestic abusers have been prevented from purchasing guns through Brady background checks since the President signed the Brady Bill into law. [Federal Bureau of Investigation, Uniform Crime Reports for the United States 1998, 1999]

Making Our Communities Safer. In April 2000, HUD Secretary Andrew Cuomo launched BuyBack America -- an unprecedented national campaign to buy back unwanted guns and raise awareness about gun safety. Eighty-four communities have pledged to use HUD funds to purchase tens of thousands of unwanted firearms, reducing deaths and injuries caused by gun crimes, accidents and suicides. The buybacks are designed to reduce the toll of gun violence that claims an estimated 30,000 lives and wounds another 100,000 people each year in the United States. Building on this effort, the President announced a new gun buyback partnership with District of Columbia law officials. Under the initiative -- the largest ever in D.C. and one of the largest ever in the country -- $350,000 will be available to purchase an estimated 7,000 guns through a local gun buyback. In addition, the Bureau of Alcohol, Tobacco and Firearms will trace all guns recovered in the buyback.



August 2000

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