PRESIDENT CLINTON AND VICE-PRESIDENT GORE:
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 67.7 percent in the third 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 10 million more homeowners than in 1993. [Census Bureau, 10/26/00; 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 $363 billion of the national debt in the last three years. The public debt at the end of FY 2000 was $2.4 trillion lower 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. [U.S. Budget, FY 2001 Mid-Session Review]
Record Levels of Homeownership Assistance. In the early 1990s, the Federal Housing Administration (FHA) was losing money and near bankruptcy. Today, FHA and the Mutual Mortgage Insurance Fund (MMI) maintain a strong financial position, exceeding the capital adequacy standards established by Congress. 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 in 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 2001, FHA will begin insuring larger home mortgage loans across the country -- up to $239,250, an increase of nearly 9 percent, 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. Already, this historic partnership is well on its way in meeting this ambitious goal. In its first 18 months, the partnership was over 20 percent ahead of schedule with over 180,000 more homes built in America's cities than expected, given construction levels in the 1990's. By bringing together the resources of the federal government with the ingenuity and creativity of local public officials and the private sector, the partnership will put the American Dream within reach of millions more low and middle income Americans, and will help revitalize America's cities at the same time.
Helping Renters Buy Their First Home. Legislation signed by President Clinton in 2000 created a homeownership voucher program that will allow recipients of Section 8 rental assistance vouchers to become first-time homebuyers, if they meet basic eligibility criteria. Under the new program, the same HUD funds helping pay a family's rent can 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, with an additional $10 million awarded in FY 2000. The President won $25 million in the FY 2001 budget to expand the IDA program. [FY 2001 Budget, p. 66; FY 2000 Budget, p. 82]
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. [HUD News Release, 3/17/97]
Protecting Homebuyers. Families who get FHA-insured mortgages each year will benefit from HUD's Homebuyer Protection Plan created in 1998 and expanded in 1999. The plan requires an appraisal of a home's physical condition before a home can be purchased with a FHA mortgage. This new system, combined with tough new penalties against appraisers who make inaccurate appraisals, protects homebuyers from being overcharged for homes and from buying homes with major defects that until now could go undetected.
Fighting Housing Discrimination
Doubling the Number of Fair Housing Enforcement Actions. To respond to reported cases of serious fair housing violations, HUD has obtained more money in recent years to combat unlawful housing discrimination. In Fiscal Years 1999, 2000, and 2001, HUD has obtained for fair housing budget increases for three straight years, establishing record funding levels for fair housing each year. In this most recent fiscal year, FY 2001, the President won $4
46 million to fight housing discrimination, which includes $7.5 million to fund the third and final year of a national housing discrimination study. When completed, the audit will have consisted of 3,000 to 5,000 tests for housing discrimination. In addition, HUD has obtained funds for local non-profit groups and state and local enforcement agencies to monitor and act against housing discrimination. The Clinton-Gore Administration has also taken over 3,200 enforcement actions from 1993 to 2000 to ensure equal housing opportunity. The Administration took twice the number of actions in its second term when compared to the first. These include actions taken in virtually all areas of real estate market.
Attacking Predatory Lending. Expanded access to credit from both prime and subprime lenders has contributed to the highest homeownership rates in the nation's history. However, there is growing evidence that some lenders are engaging in predatory lending practices that make homeownership much more costly for families that can least afford it such as excessive front-end fees, single premium credit life insurance, and exorbitant prepayment penalties. In April 2000, HUD Secretary Andrew Cuomo and Treasury Secretary Lawrence H. Summers announced a joint HUD-Treasury Task Force on Predatory Lending. In June, 2000, based on information gathered at five field forums, the Joint Task Force issued a report, "Curbing Predatory Home Mortgage Lending," which proposes a four-point plan to address predatory lending practices. Steps recommended are to improve consumer literacy and disclosures; prohibit harmful sales practices, such as "loan flipping," in the mortgage market; restrict abusive terms and conditions on high-cost loans; and improve the market structure, through use of the Community Reinvestment Act.
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. In FY 2001, Congress approved President Clinton's proposal to increase the cap on the LIHTC from $1.25 per capita to $1.75 per capita by FY 2002 restoring the value of the credit to its 1986 level and helping to develop an additional 180,000 units of affordable housing for working families over the next five years. [FY 2001 Budget, p. 128]
Creating More Affordable Housing with the HOME Program. The FY 2001 budget provides $1.8 billion a $200 million increase for the HOME Investment Partnerships Program 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. The program also supports housing vouchers and homeownership counseling. HOME's flexibility empowers people and communities to design and implement strategies tailored to their own needs and priorities. With the FY 2001 increase, the HOME Program will create homeownership opportunities and affordable housing for an estimated 67,000 families in the next year. [Department of Housing and Urban Development; HUD Press Release, 2/7/00]
Housing Vouchers for Hard-Pressed Working Families. President Clinton has secured nearly 200,000 new housing vouchers in the last three years to help welfare recipients and other hard-pressed working families. These vouchers will expand the supply of affordable housing for the 5.4 million very-low-income families who pay more than half their incomes for housing or live in severely inadequate units, including a growing number of families working full time. Vouchers often enable families to move closer to job opportunities.
Increasing Voucher Use and Tenant Housing Options. The FY 2001 budget helps Public Housing Authorities use some housing vouchers to expand tenant rental opportunities through direct contracts with owners for housing. Tenants moving into this housing will not have to give up their rental assistance if their family subsequently needs to move.
Restructuring the Section 8 Program. In 1997, HUD obtained enactment of legislation to end excessive rental subsidies to private landlords under the project-based Section 8 program, saving taxpayers nearly $1.6 billion over five years. This increased funding of $4.6 billion, enabled HUD to renew all expiring Section 8 contracts.
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. Because of the Administration's Continuum of Care approach, more than 400,000 formerly homeless people are no longer homeless. 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. [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; FY 2001 Budget, p. 124]
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. Since 1993, funding for the Housing Opportunities for Persons with AIDS program has more than doubled, from $100 million in 1993 to $258 million in 2001. 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 1999, HOPWA provided housing assistance for 41,500 households and over 51,000 persons with HIV/AIDS and their families.
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. [White House, Office of the Vice President, 7/25/00]
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 -- was available to tribes for IHBG assistance; in FY 2001, the President again secured his full request of $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 December 2000, the President unveiled a new final rule that clarifies what Public Housing Authorities must do to assure that families of various incomes and races have maximum opportunities in the public housing and voucher programs. 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 has approved the demolition of over 100,000 severely distressed public housing units to be replaced with lower-density, townhouse-style developments which can serve as anchors for neighborhood renewal. To date, HUD has demolished nearly 60,000 units between the HOPE VI and Public Housing Capital programs. HUD has awarded $4.9 billion in grants to spur economic development and change the shape over 100 public housing developments nationwide. [Department of Housing and Urban Development]
Bringing Computers to Public Housing Neighborhoods. The Clinton-Gore Administration has created more than 1,000 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. [HUD, Neighborhood Networks Success Stories]
Transforming Public Housing Developments into Campus of Learners. President Clinton's Campus of Learners Initiative provides public housing residents with training in new technology and telecommunications, and partake in educational opportunities and job training initiatives. 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 for public housing residents. This initiative supports the Clinton-Gore Administration's larger effort to transform public housing and stimulate welfare reform. [HUD, Campus of Learners]
Revitalizing Our Nation's Communities
Encouraging Investment in Underserved Communities with the New Markets Initiative. President Clinton's New Markets Initiative will stimulate new private capital investments in economically distressed communities and build a network of private investment institutions to funnel credit, equity and technical assistance to businesses in America's new markets. President Clinton and Speaker Hastert worked together to enact this bipartisan initiative as a part of the FY 2001 budget. The agreement includes extension and expansion of Empowerment Zones, an increase in the Low Income Housing Tax Credit, the creation of the New Markets Tax Credit, the creation of New Markets Venture Capital Firms, and the creation of 40 Renewal Communities. 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 Investment in Urban and Rural Areas. Spurring economic development in distressed communities, the Clinton-Gore Administration has created 31 Empowerment Zones (EZs) and more than 100 Enterprise Communities (ECs), 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 secured $70 million in funding for Rural and Urban Empowerment Zones in FY 2000 after Congress initially provided no funding. The FY 2001 budget agreement extends and expands the incentives in the existing EZs, as well as creates nine new Round III Empowerment Zones for a total of 40. [FY 2001 Budget, p. 123; FY 1997 Budget, p. 58]
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 won $118 million, including $5 million for technical assistance and training for Native American communities. [FY 2001 Budget, p. 124]
Strengthening Community Reinvestment. In November 1999, President Clinton signed 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. [FY 2001 Budget, p. 125, 197]
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 1.2 million in FY 1999 alone. 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 proposed and Congress passed a twoyear extension of the time during which grantees can spend Welfare-to-Work funds. The Welfare-to-Work and Work Opportunity Tax Credits provide tax incentives to encourage businesses to hire welfare recipients by offering one to two-year tax credits to defray some of the employees wages. 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; the FY 2001 budget agreement includes $100 million for this program, up from $75 million last year. In addition, the Clinton-Gore Administration made it easier for low-income families to get to work by allowing them to own a reliable car without losing nutritional support and working with Congress to allow states to conform their food stamps vehicle policy with a more generous TANF vehicle policy. [White House, Office of the Press Secretary, 8/5/97; FY 2001 Budget, p. 127, 258; FY 2000 Budget, p. 135; FY 1999 Budget, p. 87]
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. The FY 2001 budget provides $5.124 billion, a $343 million increase for CDBG over 2000. CDBG funds are used for a wide range of community development activities directed toward neighborhood revitalization, economic development, and improved community facilities and services. The Section 108 program 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. Congress approved President Clinton's proposal to provide $1.26 billion for Section 108 funds in the FY 2000 budget. [FY 2001 Budget, p. 227]
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. [EPA, Superfund NPL Construction Completions Since 1/20/93 to 5/18/00]
Lowest Overall Crime Rate in 26 Years. Under the Clinton-Gore Administration, America has experienced the longest continuous drop in crime on record. Violent crime rate fell 30 percent since 1992 and is at its lowest level in two decades, and the murder rate is down more than 38 percent since 1992. The overall crime rate is the lowest in 26 years, and has dropped for eight years in a row. President Clinton and Vice President Gore have put 100,000 additional police on the streets through the COPS program, and in 2000 President Clinton won over $1 billion to help communities take the next step and hire up to 50,000 more police officers by FY 2005. And since the President signed the Brady Bill into law, more than 611,000 felons, fugitives and domestic abusers have been prevented from purchasing guns through Brady background checks. [FBI, Uniform Crime Reports for the United States 1998, 1999]