"This budget demonstrates (our) commitment to protecting homeownership by helping families facing foreclosure, while recognizing the need for more affordable rental housing," said Jackson. "The president is also making certain that HUD's budget once again includes record funding to support homeless individuals and families."
The 2009 Budget seeks a record $1.636 billion to support thousands of local homeless programs; $2 billion to promote local affordable housing development; and $29.4 billion for rental assistance for low-income families.
While homeownership rates continue at near historic levels, many lower income families are facing the prospect of foreclosure as their subprime adjustable-rate mortgages reset. To combat this challenge, HUD plans to spend $65 million for housing counseling, a $15 million increase over 2008.
Jackson said that in June 2002, Bush challenged the nation to close the minority homeownership gap by increasing the number of minority homeowners by 5.5 million by the end of this decade.
"Since the president issued his challenge, 3.74 million minority families have joined the ranks of homeowners, putting the nation on schedule to reach that goal," Jackson said. "The new budget proposal also increases funding for several programs that advance the goal of creating and preserving an ownership society."
These programs include:
1. The Federal Housing Administration: FHA is undergoing a transformation to give homebuyers who do not qualify for prime financing a better alternative to high-cost, high-risk loan products. Many of these types of non-traditional mortgages triggered high foreclosure rates that the nation is currently experiencing. Jackson said the House and Senate agree with the administration's proposal to modernize the FHA and are currently working on a reconciled bill for the president's signature.
2. HOME Investment Partnerships Program: HOME is the largest federal block grant program dedicated to creating affordable housing for low-income families. The administration is proposing $2 billion for the HOME program in FY 2009, an increase of $263 million from FY 2008 enacted. Each HOME dollar allocated to a local jurisdiction traditionally leverages more than three dollars from other public and private sources.
3. Housing Counseling: The proposed budget requests $65 million, a $15 million increase over current levels, to support 2,300 housing counseling agencies across the country. This will increase funding for housing counseling by 150 percent since the program was launched in 2001. These programs offer a wide array of counseling services to prepare families to buy their first home, to avoid predatory lending practices, and assist current homeowners facing default. Jackson said housing counseling is considered the most cost-effective way to educate renters and homeowners to make informed financial decisions and avoid high-risk, high-cost loans that place them at greater risk of foreclosure.
Another HUD effort is the Self-Help Homeownership Opportunity Program, called SHOP. By supporting self-help homeownership programs like Habitat for Humanity and others, Jackson said HUD can help families "to realize the American Dream of homeownership through so-called sweat equity grants."
He said the term "sweat" is used because those who benefit from SHOP funds must contribute at least 100 hours of their own labor to help construct or rehabilitate their new home.
The 2009 budget seeks $39 million for SHOP, an increase of $12.5 million over the current appropriation.
This story contains 575 words.
If you are a paid subscriber, check to make sure you have logged in. Otherwise our system cannot recognize you as having full free access to our site.
If you are a paid print subscriber and haven't yet set up an online account, click here to get your online account activated.