USDA wants to boost minority homeowners

Spectrum, by Bill Allen

Owning a home continues to be the oldest and best form of building equity in America and serves as the bedrock of the U.S. government's commitment to rural Alaska.

Homeownership promotes strong families, and economic stability for Alaska's communities. It is also a great way to build equity, which leads to financial security. June is National Homeownership Month.

According to U.S. Census Bureau figures, 67.3 percent of Alaska's families are home owners. This is a historic high, trailing the national rate by 1 percent. In cooperation with federal and state partners, including the Alaska Housing Finance Corporation, and Alaska's financial institutions and housing authorities, USDA Rural Development has worked to ensure that more Alaskans than ever before are able to pursue the dream of homeownership.

More remains to be done. President Bush has set a nationwide goal of increasing minority homeownership by 5.5 million by the year 2010. In support of this goal, USDA Rural Development is aggressively implementing a Five Star commitment to expand minority homeownership including, lower fees to reduce barriers to minority homeownership; double the number of self-help participants by 2010; increase participation by minority lenders, promote credit counseling and homeownership education; and monitor lending activities to ensure a 10 percent increase in minority homeownership.

Additionally, to assist more low- to very-low income families obtain financing for safe secure housing, President Bush has proposed a 32 percent increase for USDA Rural Development single-family housing direct loans in his 2004 budget.

It is important to recognize that without national partnerships the dream of homeownership could not be realized for many rural families. For example, the Rural Home Loan Partnership effort has brought together USDA Rural Development, Rural Local Initiatives Support Corporation, Office of Thrift Supervision, Federal Home Loan Bank Board, Federal Deposit Insurance Corp. and the Neighborhood Reinvestment Corp. Through this partnership, the dollars committed by USDA Rural Development leveraged an additional 30 percent outside investment that resulted in lower overall cost for homes in rural America. The result is homes for those Americans who thought they would never be able to own a home. This is an achievement we all can be proud of.

The opportunity to increase homeownership can also be achieved through several innovative approaches embraced by the Administration. One unique program that has received special support over the last several years is the Mutual Self-Help Housing program. Under this program, five to 12 families join forces and build their own homes. This program is worthy of note because it has allowed many families achieve home ownership through the building of equity that reduces the home purchase costs by 20 percent and allows families to learn valuable skills along the way.

Later this month representatives of nine Alaska families will join with representative of USDA Rural Development and the Alaska Community Development Corporation to break ground on a new self-help housing project at Settler's Bay. The Corporation received a grant through USDA Rural Development to provide technical assistance to the families, including purchasing materials, processing loans, inspections and on site coordination and supervision through the various phases of construction. Working as a team, the families will construct their new homes. It won't be easy, but it will be rewarding. The program requires the families to join together to do at least 65 percent of the work and no individual family can move in until all of the homes are completed. The program works well. Last year, seven families completed homes in a subdivision near the Bodenburg Butte in Palmer.

In short, USDA's Rural Development programs have an excellent track record of building opportunities for homeownership and building stronger communities. By investing in homeownership, families can build wealth and open new job opportunities that will spur a generation of new economic activity in rural communities. USDA Rural Development joins President Bush in reaching new heights in homeownership in rural America.

Bill Allen is the Alaska State Director, USDA Rural Development.