Building on the American dream

Spectrum, by Colleen Bickford

Homeownership is a cornerstone of America -- a source of strength for families, communities and our nation. This past week, the U.S. House of Representatives passed President George W. Bush's American Dream Down Payment Act and took an important step toward helping more families realize their dreams of homeownership.

The biggest barrier to homeownership for many families is their inability to come up with enough cash to meet down payment and closing costs.

The average cost of a home in Anchorage is $242,500. For a conventional loan, the prospective homeowner would have to come up with a 10- to 20-percent down payment, approximately $24,000 to $48,000, in addition to several thousand dollars in closing costs. This is out of reach for far too many of our families. Even through Federal Housing Administration guaranteed loans, which require substantially lower down payments, the upfront costs are more than many households can afford. That's why I'm so pleased that the American Dream Down Payment Act is making progress in Congress toward enactment into law.

The American Dream Downpayment Act provides a total of $400 million over two years to help 80,000 low-income, first-time homebuyers nationwide cross the down payment barrier. If passed by the Senate and enacted into law, qualifying low-income homebuyers could receive an average down payment assistance grant of $5,000. This assistance, along with new regulations proposed by U.S. Department of Housing and Urban Development Secretary Martinez to lower closing costs for all Americans, will help to increase homeownership, particularly among minorities who continue to significantly lag behind historically high national homeownership rates.

HUD appreciates the bipartisan support of the nearly 100 House members who cosponsored this bill. They recognize that homeownership is the pathway to realizing the "American Dream."

Homeownership is important because it offers children a stable living environment that influences their personal development in many positive ways. It creates community stakeholders who tend to be active in charities and churches. It inspires civic responsibility. And when we help families clear the down payment obstacle, we open them up to the wealth-building opportunities that homeownership provides.

Hard-working families across the country will profit from both the community and economic benefits that come from owning a home.

Minority homeownership is growing, but still lags behind the homeownership rates for the population as a whole. Last year, President Bush announced a bold plan to create 5.5 million new minority homeowners by the end of the decade.

Recognizing that the government alone cannot achieve this goal, the president has called on the real estate, mortgage finance, and homebuilding industries to join the administration in our commitment to increasing homeownership rates for all Americans, but especially for minorities.

House passage of the American Dream Down Payment Act represents great progress, and HUD applauds Representative Don Young's support. This is a step towards victory for every community in America, and for every family that dreams of having a home of their own.

Colleen Bickford is the Alaska Field Office director of HUD, in Anchorage.