House Approves American Dream Downpayment Act
December 10, 2003
Quick Action by Senate Also Approves the Act
On Monday, December 8, the House approved legislation to help more Americans realize the American dream of homeownership. Introduced by Rep. Katherine Harris (FL) and Rep. Mike Rogers (MI), the American Dream Downpayment Act is a new initiative proposed by President Bush to set first-time, low-income homebuyers on the path to homeownership by helping with down payment and closing costs. The action clears the bill for President Bush’s signature. Later in the day, the Senate passed the legislation on a voice vote, sending it to the President for this signature
"In addition to the tremendous benefit and sense of satisfaction thousands of families will gain from owning their own homes, this legislation will help to strengthen our communities by increasing the number of stakeholders in neighborhoods across the country,"said House Financial Services Committee Chairman Michael G. Oxley (OH).
Downpayment and closing costs are traditionally the most significant obstacles that would-be homebuyers face. This legislation eliminates that barrier for families struggling to save for a downpayment, but otherwise qualified for homeownership.
"By passing the American Dream Downpayment Act, Congress has fulfilled the basic obligation of a decent and compassionate society. This visionary, comprehensive legislation will provide thousands of men, women, and children across our nation with the dignity, stability, and economic empowerment of home ownership,"said Rep. Harris, the sponsor of the American Dream Downpayment Act.
The $200 million in grants provided in the American Dream Downpayment Act will assist an estimated 40,000 low-income families each year to share. More than 500 State and local jurisdictions will be eligible to receive the grant funding, and the program will be administered through the Department of Housing and Urban Development’s HOME Investment Partnerships Program.
"Today the nation’s overall homeownership rate is an impressive 68 percent. More than two-thirds of all Americans own their own homes; but the homeownership rate for African-American, Hispanic and other non-Hispanic minorities is approximately 49 percent. This legislation will play a significant role in narrowing the minority homeownership gap,"said Subcommittee on Housing and Community Opportunity Chairman Bob Ney (OH).
In addition to the American Dream Downpayment Act, provisions from a bill introduced by Rep. James Leach (IA), H.R. 1614, the HOPE VI Program Reauthorization and Small Community Mainstreet Rejuvenation and Housing Act of 2003, were also included. H.R. 1614 reforms and reauthorizes the HOPE VI program through fiscal year 2006.
HOPE VI has been an important part of the transformation of public housing and distressed communities since 1993. The legislation passed yesterday includes provisions to improve the management and accountability of the program. Additionally, small communities wishing to revitalize their downtowns will now be eligible HOPE VI recipients.
"For the first time since the inception of the HOPE program in 1990, small communities will have access to this important federal housing approach,"Leach said.
Also included are provisions from legislation introduced by Rep. Gary Miller (CA) and Financial Services Committee Ranking Member Barney Frank (H.R. 1985) to update the Federal Housing Authority (FHA) multifamily program. This legislation will help to address the critical housing needs in high-cost communities across the country by allowing the Secretary of HUD to increase the maximum FHA multifamily mortgage limits in high-cost areas.
"I am pleased that S. 811 included provisions from a bill I authored, H.R. 1985, to allow the HUD Secretary to increase multifamily mortgage loan limits for Federal Housing Administration (FHA) insured properties in high-cost areas,"said Miller. "There are markets where construction costs are significantly higher than in other areas of the country. This makes it difficult or impossible for builders to use the FHA program because the current limits are insufficient. Passage of this legislation will help ensure hard-working Americans have access to decent, affordable rental housing in the neighborhoods where they work."
Finally, the bill includes a technical correction that would allow the FHA to offer more flexible 5/1 hybrid adjustable rate mortgages and a change to the Community Development Block Grant program to address many of the critical housing needs in insular areas.
Source: House Financial Services Committee