Homeownership Tax Credit and Zero-Down Mortgage, HUD Secretary Says - 1/24/2005 - Mortgage Loan Refinance Debt Equity

Administration Renewing Push for Homeownership Tax Credit and Zero-Down Mortgage, HUD Secretary Says

“President Bush says that when a person owns a home, they have a vital stake in the future of our country. Homeownership, to me, is the American dream. It has the power to transform lives and communities,” said Jackson.

To boost affordable housing production and to help hundreds of thousands of working families to overcome a major financing barrier to owning their own home, Jackson said the Administration will be urging the Congress to enact two NAHB-supported legislative initiatives — a homeownership tax credit and an FHA single-family zero downpayment mortgage insurance program.

“If we listen to you, we can help you develop housing much better. Unless we give you incentives to build in urban areas, you don’t have to build in urban areas. That’s why this Administration is proposing a homeownership tax credit,” said Jackson, who noted that it could create as many as 50,000 more home owners annually.

The proposal received strong support in both chambers of Congress last year, and the HUD secretary said he would work with NAHB to move the legislation forward in the 109th Congress.

Dismissing critics who contend that the zero downpayment program would lead to higher default rates, Jackson said that the proposal enjoyed solid support in the last Congress and that it remains a priority for the Administration.

“Firefighters, police officers, teachers and nurses don’t default on their home. We need to give them an opportunity” to become new home owners, he said.

With President Bush setting a goal of increasing the supply of affordable housing by seven million units over the next decade, Jackson said that expanding homeownership represents “just one piece of a very large pie” for his housing agenda in the coming year.

“I’ve made reform of the Section 8 rental assistance program another of my priorities for 2005,” he said. “Section 8 costs are growing out of control and cannibalizing every HUD program. If we don’t solve this program, all our programs — including our homeownership efforts — will be in jeopardy.”

Jackson also said that he will seek to propose new Real Estate Settlement Procedures Act (RESPA) regulations that simplify the home buying process and make it less costly for consumers.

In marking the 40-year anniversary of the creation of HUD, Jackson noted that NAHB "has worked more closely with us to make housing more affordable to more Americans."

Photograph by Oscar Einzig Photographers