For those who build, sell and finance homes, and for those who wonder if they'll ever own one, the true test of a national homeownership plan is just beginning.
Last week, a federal agency pledged to direct a coast-to-coast ++ effort to put 8 million families into homes of their own in five years. The Department of Housing and Urban Development said it could boost a shrinking homeownership rate without a single cent more of taxpayer money or another layer of government bureaucracy. But not without some help.
As the Clinton administration unveiled its strategy, it called on real estate agents and builders, housing counselors and lenders, and state and local officials to join forces in one of the largest housing umbrella groups ever created.
During the past seven months, HUD Secretary Henry G. Cisneros and about 50 national public and private associations have been working on a strategy. They've compiled a list of 100 ideas public-private partnerships can use to make financing and transaction costs more affordable, remove discriminatory and regulatory barriers and reach millions of potential buyers who never thought they could own a home.
Now, after the public unveiling by President Clinton at a White House ceremony Monday, industry representatives are preparing to put the nuts and bolts of the plan in place. It is expected that local affiliates of the 50 groups will form partnerships with HUD or other government agencies.
"I really think this is the most effective way to do it," said Mary Fruscello, executive vice president of the Maryland Association of Realtors. "It's going to take a coordinated effort between all the groups that affect homeownership. At the national level, you can set the agenda, but it'll be at the local level you get it done."
For years, groups have worked mostly separately, sometimes unaware of each others' plans, to reduce costs and streamline the home buying process. But homeownership is enjoyed by only 64 percent of all families -- and much lower percentages of minorities -- so "what has to be done now is addressing the more challenging issues that are keeping the other 30 percent from owning a home," Ms. Fruscello said.
From 1940 to 1980, homeownership nationally increased from 43.6 percent of all households to 65.6 percent. Over the past 15 years, the rate has dipped below its historic high, even though it has come back up over the past two years. The goal of 8 million new homeowners by 2000 would increase the rate to 67.5 percent. According to HUD, recent surveys show that two-thirds of renters would buy a home if they could afford to own one.
Better coordination among housing groups should help make more potential buyers aware of the many programs out there, especially for low- to moderate-income buyers and first-timers who need help with up-front cash, said Christine Vasiliou, executive vice president of the Greater Baltimore Board of Realtors.
For instance, she said, fewer buyers than anticipated have made use of a city program in which buyers can opt to pay property taxes semi-annually, reducing the amount of cash needed at settlement. In Maryland, officials at the HUD office in Baltimore have been meeting with a 34-member task force of nonprofit housing groups, civil rights groups, real estate agents, lenders, builders and state and county officials.
Candace S. Simms, HUD's single-family housing director in Baltimore, says task force members have been strongly motivated to remove barriers to homeownership -- though they're getting no additional funding and might even voluntarily pick up more of the costs -- because promoting homeownership can ultimately boost business and strengthen communities.
Some proposals being considered include:
* Expanding use of the Federal Housing Administration's 203(k) program, which offers federally insured loans to purchase and rehabilitate homes.
In the past, lenders have often been reluctant to get into a program they viewed as too complex, requiring lenders to get extra training and monitor renovations. HUD has been working to streamline the process and train lenders, Ms. Simms said.
* Distributing existing HUD funds to help housing agencies counsel buyers on how to qualify for a loan and purchase a home. Funds, to be available this summer, can cover operating expenses and staff.
* Helping mortgage banker trade groups adopt voluntary fair housing practices, in which trade group members would be encouraged to be more aggressive about making loans in
underserved communities, such as areas of predominantly low-income or minority residents.
Already, the Real Estate Brokers of Baltimore Inc. is offering free mortgage credit reports this month to all clients under contract to buy a HUD property or use HUD financing. Normally, these cost homebuyers $45 to $65.
Pat Porter, the Lutherville-based 203(k) training director for Crossland Mortgage Corp., said she expects her company and other lenders to begin offering similar incentives, to help cut costs of settling on a home.
It's worth it for lenders to help cut closing and transaction costs, Ms. Porter said, to generate business from borrowers who would otherwise be shut out of the housing market.
HUD suggests that anyone seeking advice or assistance in buying a home contact a real estate agent or lender or the National Partners in Homeownership, at P.O. Box 6091, Rockville, Md. 20850.
Advice and counseling is also available by calling the National Cooperative Bank (800-955-9622), National Foundation for Consumer Credit (800-388-2227), National Association of Home Builders (800-368-5242), Fannie Mae (800-7-FANNIE), or by contacting the Baltimore HUD office at 962-2520, extension 3135.