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June 17 In the wake of President Bushs announcement that we wants to make it easier to own a house and close the homeownership gap between whites and minorities, Secretary of Housing and Urban Development, Mel Martinez joins MSNBC.com Chat to discuss the details and practicalities of the plan. Secretary Martinez answered questions through a typist. Chat producer Willl Femia moderates.
MSNBC-Will Femia: Welcome Secretary Martinez.
Secretary Martinez: Thank you.
MSNBC-Will Femia: Since this is the most common comment on the list, we might as well get it out of the way now
Question: When the government uses taxpayer money to make it easier for one group, based on gender or race or ethnicity, to purchase a house, as compared to some other group, why is that not considered to be discriminatory behavior and therefore banned by law and the Constitution?
Question: Is this legislation only apply to minorities, or are lower income whites going to be able to enjoy this opportunity?
Question: I thought President Bush was against affirmative action and racial quotas. Why does he now want to give help only to poor minorities to get new houses? Are there no poor white people who need homes? Is there some special kind of discrimination that is preventing non-whites from saving their money?
Secretary Martinez: First and foremost its available to all Americans. Were attacking an issue of ownership gap between the minority population and the rest of the country. We know that two thirds of white Americans own their homes and we know that less than 50% of minorities own their home. The emphasis of this program is to create awareness in the minority population of tools that are available to achieve the dream of home ownership.
Question: How will this program work? And how do I get my name of the list
Question: Will, I am a perfect example of this thing. I am 27 years old with 4 kids, no credit, on the job for 5 years but got denied a home 2 years ago because I had no credit and I couldnt come up with $8000 down....
Secretary Martinez: This is the perfect applicant. Regardless of this persons race or ethnicity, this is who this program is designed to assist. There are two things that this announcement today by the President can do for this person: down payment assistance and home ownership education.
It is important that this person understand how to create a good credit record to qualify for a mortgage. And through this program, we will assist people and a part of what they need to come up with the down payment.
Question: Will, this is in New Orleans, but a home down the street, that needs lots of work and is quite small, just sold for $250,000
MSNBC-Will Femia: Is this grant enough?
Secretary Martinez: Well, it wont be enough to buy a $250,000 home more than likely, so part of the problem is to improve the stock or create more houses that are affordable. The Presidents plan creates a single family construction tax credit. Its a tax incentive for a developer to build affordable housing in distressed areas which then will allow people like the questioner to buy a home at a rate that would be affordable to that persons income. This is for that person assuming that person would be a first time home buyer, were trying to assist first time home buyers.
Question: USDAs rental construction loan program, which once produced as many as 33,000 new affordable apartments every year, would lose all funding for new construction under the administrations budget. It would receive only slightly more than half of this years funding and would be limited to repair and preservation of existing units. At the same time, HUD public housing funds would be sharply reduced. Were glad to see the administration increasing HUDs self-help homeownership program, which helps low-income people afford their homes by putting their own sweat equity into the construction process. But in rural areas most of them get loans from USDA because their incomes are too low for bank loans. So isnt increasing one program and decreasing the other counterproductive?
Secretary Martinez: First of all, we do not reduce funds for public housing in this years budget. We have proposed in this years budget a new funding mechanism for repairs and modernization of the stock of public housing which relies on private financing as a way of increasing the amount of public housing which could be improved in the coming year. So to be clear, the Presidents proposed budget does not decrease the budget for public housing. The rural housing program is one that we believe belongs in the Department of Agricultures budget, not in the HUD budget. The Department of Agriculture does rural housing. HUD is the Department of Housing and Urban Development. The Congress began this rural housing program and put it in the HUD budget several years ago, and both the Clinton administration and the Bush administration have felt it was more appropriate for this housing program to be at Agriculture and not at HUD.
Question: The article on MSNBC says this is supposed to help 40,000 families. Is that enough? How many low income families are there in America? How many new houses would fix the problem?
Secretary Martinez: The 40,000 is only the number that will be helped through the American Dream Down Payment Initiative. Thousands more will be helped by the private sector initiatives that are being joined in this program such as the things that Fannie Mae and Freddy Mac are offering to do. Also the initiatives of the National Association of Homebuilders and also the initiatives of the National Association of Realtors and others, all of which are part of this unprecedented national effort to increase the number of homeowners in our country.
Question: Will there be a work component to this proposal like with other welfare ideas? Will they be required to work neighborhood watch or anything?
Secretary Martinez: Theres not a work component with the down payment assistance program. These are not people on welfare. In order to buy a home people must have a job. This program is designed to help hardworking Americans get that small bit of help as a jump into the ranks of homeownership, which we believe greatly benefits the country.
Question: Where can lenders go to find this information about the new down payment programs
Secretary Martinez: The website of http://www.hud.gov or the local regional HUD office near them.
Question: How can we as housing authority directors help our residents make this jump into homeownership?
Secretary Martinez: By implementing the section 8 down payment program and by partnering with local private sector and non-profits involved in affordable housing.
Question: What if I have bad credit, or if Ive filed for bankruptcy: Would I qualify?
Secretary Martinez: You could qualify. The thing for you to do is fix your credit and you would do that by directing yourself to a housing counseling center. Or there are many not for profits in communities who are there to assist people in the home buying process. But that shouldnt be a definite disqualifier. Again the HUD offices in the localities could also be a place where they could go and begin that process of information gathering. Its a problem, but not a permanent disqualifier. A person in that position just needs to seek help to fix that problem.
Question: Mr. Secretary, President Bush said that he wants to educate first-time home buyers to protect them from abusive lenders. Are there also plans to prosecute abusive lenders themselves? It doesnt make sense to educate potential victims about predators without going after the predators as well.
Secretary Martinez: We are aggressively pursing prosecution of abusive lenders. More than 40 successful prosecutions have taken place just in Baltimore during the time Ive been in office. We have, in this administration, more than doubled the funding that prosecutes and pursues lender abuse in this area. And in a few days I will be announcing the most far reaching reforms in more than 20 years to the home buying process which will help people overcome this problem. So we are attacking it at both ends, prosecuting lenders and better educating the home buyers as well as reforming the process.
Question from Ed Blaine: How hopeful are you about getting this through congress and especially Daschles obstructionist Senate? Does it stand a chance?
Secretary Martinez: Were hopeful and well battle for it.
MSNBC-Will Femia: How much of it is already good to go?
Secretary Martinez: Were hopefully and well battle for it. Theres a lot about this program that doesnt depend on new congressional enactments. We are hopefully that those things which require congressional action will receive it in this congressional session.
Question: I will never believe the government is really trying to help out 1st time buyers until tax breaks for renters are at least somewhat comparable to those homeowners get. Please comment on what is being done for the current renter trying to save for a home.
Secretary Martinez: Were offering down payment assistance and Section 8 vouchers that can be utilized for your down payment as well if you happen to be receiving a Section 8 voucher to help you with your rent. The tax code does not come under HUD jurisdiction.
MSNBC-Will Femia: Thank you very much for chatting with us Mr. Secretary. Can you give us some closing comments before we have to let you go?
Secretary Martinez: I was very pleased with the far ranging and dynamic announcements the President made today. The American dream of owning a home not only helps a family but homeowners strengthen communities by creating more homeowners in America. We are creating better communities across America. Im proud of the President for putting forth these golden issues. Thank you for your time.
MSNBC-Will Femia: Thank you very much Secretary Martinez.
Secretary Martinez: Thank you.
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