[Congressional Record Volume 149, Number 137 (Wednesday, October 1, 2003)]
[House]
[Pages H9039-H9045]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
AMERICAN DREAM DOWNPAYMENT ACT
Mr. NEY. Mr. Speaker, I move to suspend the rules and pass the bill
(H.R. 1276) to provide downpayment assistance under the HOME Investment
Partnerships Act, and for other purposes, as amended.
The Clerk read as follows:
H.R. 1276
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``American Dream Downpayment
Act''.
SEC. 2. DOWNPAYMENT ASSISTANCE INITIATIVE UNDER HOME PROGRAM.
(a) Downpayment Assistance Initiative.--Subtitle E of title
II of the Cranston-Gonzalez National Affordable Housing Act
(42 U.S.C. 12821) is amended to read as follows:
``Subtitle E--Other Assistance
``SEC. 271. DOWNPAYMENT ASSISTANCE INITIATIVE.
``(a) Grant Authority.--The Secretary may make grants to
participating jurisdictions to assist low-income families to
achieve homeownership, in accordance with this section.
``(b) Eligible Activities.--
``(1) In general.--Amounts made available under this
section may be used only for downpayment assistance toward
the purchase of single family housing by eligible families.
For purposes of this title, the term `downpayment assistance'
means assistance to help a family acquire a principal
residence.
``(2) Eligible families.--For purposes of this section, the
term `eligible family' means a family who--
``(A) is a low-income family and a first-time homebuyer; or
``(B) notwithstanding the income limitation under section
215(b)(2)--
``(i) includes a uniformed employee (which shall include
policemen, firemen, and sanitation and other maintenance
workers) or a teacher who is an employee, of the
participating jurisdiction (or an agency or school district
serving such jurisdiction) that is providing the downpayment
assistance under this section for the family; and
``(ii) has an income, at the time referred to in
subparagraph (A), (B), or (C) of section 215(b)(2), as
appropriate, and as determined by the Secretary with
adjustments for smaller and larger families, that does not
exceed 115 percent of the median income of the area, except
that, with respect only to such areas that the Secretary
determines have high housing costs, taking into consideration
median house prices and median family incomes for the area,
such income limitation shall be 150 percent of the median
income of the area, as determined by the Secretary with
adjustments for smaller and larger families.
``(c) Housing Strategy.--To be eligible to receive a grant
under this section for a fiscal year, a participating
jurisdiction shall include in its comprehensive housing
affordability strategy under section 105 for such year--
``(1) a description of the use of the grant amounts;
``(2) a plan for conducting targeted outreach to residents
and tenants of public housing, trailer parks, and
manufactured housing, and to other families assisted by
public housing agencies, for the purpose of ensuring that
grant amounts provided under this section to a participating
jurisdiction are used for downpayment assistance for such
residents, tenants, and families; and
``(3) a description of the actions to be taken to ensure
the suitability of families provided downpayment assistance
under this section to undertake and maintain homeownership.
``(d) Formula Allocation.--For each fiscal year, the
Secretary shall allocate any amounts made available for
assistance under this section for the fiscal year in
accordance with a formula, which shall be established by the
Secretary, that considers a participating jurisdiction's need
for and prior commitment to assistance to homebuyers. The
formula may include minimum allocation amounts. In
considering a participating jurisdiction's prior year's
commitment to assistance to homebuyers, the formula shall
consider amounts committed to such purpose under the HOME
investment partnerships program, the community development
block grant program, mortgage revenue bonds, and prior year's
funding from State and local governments, provided that the
data underlying such funding is uniform, verifiable, and
accurate by the State and local government, and shall
consider other factors that the Secretary determines to be
appropriate.
``(e) Reallocation.--If any amounts allocated to a
participating jurisdiction under this section become
available for reallocation, the amounts shall be reallocated
to other participating jurisdictions in accordance with the
formula established pursuant to subsection (d), except that
if a local participating jurisdiction failed to receive
amounts allocated under this section and is located in a
State that is a participating jurisdiction, the funds shall
be reallocated to the State.
``(f) Applicability of Other Provisions.--
``(1) In general.--Except as otherwise provided in this
section, grants under this section shall not be subject to
the provisions of this title.
``(2) Applicable provisions.--In addition to the
requirements of this section, grants under this section shall
be subject to the provisions of title I, sections 215(b)
(except as provided in subsection (b)(2)(B) of this section),
218, 219, 221, 223, 224, and 226(a) of subtitle A of this
title, and subtitle F of this title.
``(3) References.--In applying the requirements of subtitle
A referred to in paragraph (2)--
``(A) any references to funds under subtitle A shall be
considered to refer to amounts made available for assistance
under this section; and
``(B) any references to funds allocated or reallocated
under section 217 or 217(d) shall be considered to refer to
amounts allocated or reallocated under subsection (d) or (e)
of this section, respectively.
``(g) Administrative Costs.--Notwithstanding section
212(c), a participating jurisdiction may use funds under
subtitle A for administrative and planning costs of the
jurisdiction in carrying out this section, and the limitation
in section 212(c) shall be based on the total amount of funds
available under subtitle A and this section.
``(h) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $200,000,000 for
each of fiscal years 2004 and 2005.''.
(b) Relocation Assistance and Downpayment Assistance.--
Subtitle F of title II of the Cranston-Gonzalez National
Affordable Housing Act is amended by inserting after section
290 (42 U.S.C. 12840) the following new section:
``SEC. 291. RELOCATION ASSISTANCE AND DOWNPAYMENT ASSISTANCE.
``The Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970 shall not apply to
downpayment assistance under this title.''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Ohio (Mr. Ney) and the gentlewoman from California (Ms. Waters) each
will control 20 minutes.
The Chair recognizes the gentleman from Ohio (Mr. Ney).
General Leave
Mr. NEY. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
on H.R. 1276 and to insert extraneous material thereon.
[[Page H9040]]
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Ohio?
There was no objection.
Mr. NEY. Mr. Speaker, I yield myself 5 minutes.
Mr. Speaker, today I rise in support of H.R. 1276, the American Dream
Downpayment Act. There are many people that we need to thank for the
point that we have gotten to today to have this tremendous piece of
legislation here on the floor of the House. This was a commitment made
by President Bush to do this piece of legislation, and Secretary Mel
Martinez brought this to our committee when I became chairman of the
Subcommittee on Housing and Community Opportunity.
I have to also directly thank the gentlewoman from California (Ms.
Waters), our ranking member of the subcommittee, for all of her work,
her bipartisan spirit, and her concern for housing for all people from
all walks of life, from the rural and urban areas across the United
States. I want to thank the gentleman from Ohio (Mr. Oxley) above all,
who is chairman of the full committee, for his dedication to this
important piece of housing legislation, and obviously also to the
gentleman from Massachusetts (Mr. Frank), the ranking member of the
full committee. Also on our side of the aisle, and I am sure it will be
recognized on the Democrat side of the aisle, but Bob Foster, Carter
McDowell, and Peggy Peterson of the gentleman from Ohio's (Chairman
Oxley) staff, and also the staff of the Subcommittee on Housing and
Community Opportunity: Clinton Jones, Cindy Chetti, Tallman Johnson,
Bob Weisberg, and Hugh Halpern. Again, I want to thank all of these
individuals for coming together to support the American Dream
Downpayment Act.
This bill was introduced by the gentlewoman from Florida (Ms.
Harris). This initiative is designed to assist thousands of low-income
families realize the American dream of homeownership. Moreover, this
new group of homeowners is expected to boost the American economy with
an infusion of roughly $256 million.
The benefits of homeownership for families, communities, and our
country are obviously profound. When our citizens own homes, they
establish roots and therefore have a greater stake in their community's
growth, safety, and development.
While the national homeownership rate has steadily risen and is at an
all-time high of 60 percent, there are sectors of our population, Mr.
Speaker, for whom homeownership remains unattainable. In fact, the
homeownership rate for African Americans and Hispanics is less than 50
percent. Clearly, this is unacceptable. More can and should be done to
help all of our citizens realize the true benefits of owning a home.
If the persistent gap in minority homeownership is to be
substantially narrowed, the structural barriers to homeownership,
particularly the lack of capital for downpayments and closing costs,
must be addressed. I believe this is one of the major points to the
bill. I can remember when my father was able, finally, after 20 years
of saving for a downpayment, was able to acquire a house. I was about
10 years old. It was the greatest day of our lives. But I do not think
people ought to have to wait 5, 10, 15 years to try to get the
downpayment. They will struggle to make the mortgage payment, they will
work two jobs to do it, families will; but that downpayment is a
serious problem for many people. This legislation eliminates that
barrier for families struggling to save for a downpayment, but
otherwise would qualify for homeownership. Many low-income Americans,
particularly in minority communities, can meet a monthly mortgage
payment, but they cannot afford the downpayment and closing costs
associated with a standard residential loan.
Improving the ability of Americans to make the transition to
homeownership will be an important test of the Nation's capacity to
create economic opportunity for minorities and immigrants and to build
strong and stable communities. In most cases, the purchase of a home
will be the largest and most significant investment an individual will
make. Therefore, the home equity created by the home purchase
represents a significant share of home household net worth for most
American families.
This legislation will provide communities throughout America with
$200 million in grants for each year in fiscal year 2004 and fiscal
year 2005. An estimated 40,000 low-income families each year will
achieve first-time homeownership. Each qualifying family will be given
an average of $5,000 to be used toward downpayment and closing costs.
The American Dream Initiative will be administered as part of HUD's
HOME investment partnerships program, known as HOME, an existing
program that helps communities expand the supply of affordable housing
for low and very low income families by providing grants to States and
local governments.
Mr. Speaker, H.R. 1276 included language that would allow HUD to
place a maximum cap on the amount of funds certain urban areas could
receive under the American Dream program. During this consideration of
this legislation in the full committee markup, the gentleman from New
York (Mr. Crowley) expressed concern that this language would limit the
amount of funds areas would be able to receive.
I would want to note, Mr. Speaker, we have removed the word
``maximum'' on page 5 of the bill as reported out of the committee. The
removal of the word ``maximum'' makes the proposed formula in H.R. 1276
consistent with the pattern and practices of other programs under HUD
such as HOME and CDBG, and assures that no arbitrary limit is placed on
the amount of funds any particular area may receive.
I again want to thank everybody involved with this bill and Secretary
Martinez for his personal involvement. I also want to commend the
gentleman from Alabama (Mr. Rogers) and the gentleman from Alabama (Mr.
Davis) for their leadership on this important piece of legislation.
Without their diligent support, this legislation would not have been
possible.
In closing, Mr. Speaker, I want to note that when the gentlewoman
from Florida (Ms. Harris) came to us at the beginning of the session,
she said she wanted to be on the Subcommittee on Housing to make a
difference for all Americans from all walks of life. I want to note to
my colleagues today that she surely has made that difference. Through
the leadership of the gentlewoman from Florida (Ms. Harris), a lot of
people across this Nation are going to have, for the first time in
their lives, the opportunity to have a home in a family setting.
Mr. Speaker, I urge my colleagues to support this initiative.
Mr. Speaker, I reserve the balance of my time.
Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise today to support H.R. 1276, the American Dream
Downpayment Act, a bill to assist low-income families in achieving
homeownership by providing downpayment assistance under the HOME
Investments Partnership Act.
I would like to thank the chairman of our Subcommittee on Housing,
the gentleman from Ohio (Mr. Ney), for his leadership. I would like to
thank him for his evenhandedness in the management of the committee
that helps to bring us all together in support of legislation that
makes good sense for all of the Members of this Congress.
I would like to congratulate the gentlewoman from Florida (Ms.
Harris) and tell her how fortunate she is as a new Member to have the
support of her administration in seeing to it that she is able to have
a bill that will truly do something for American families that we would
all like to do. Normally, this bill would be thought of as a liberal
bill. This is the kind of bill that the Democrats would normally roll
out, if we were in power, because it is talking about spending money,
it is talking about spending money for poor people who want to have
homeownership, but cannot afford that downpayment.
{time} 1045
Downpayments are very tough. Many people who pay their bills
regularly, who have never missed paying their utility bills, they pay
their rent on time, they work every day, just cannot manage to come up
with that 10 percent or 15 percent or whatever is being required in
those markets for downpayments. And so that is why this bill is so
important.
[[Page H9041]]
It would create a new subtitle within the Home Investment
Partnerships Act to authorize grant by formula to States and localities
for the exclusive purpose of providing downpayment assistance to low-
income first-time home buyers; families, that is, with 80 percent or
lower of local median income, the formula to be established by HUD,
based on a grantee's need for and prior commitment to assistance to
home buyers.
The bill authorizes $200 million in funding in each of the next 2
fiscal years. The administration projects that $200 million in funding
would assist 40,000 low-income home buyers. The downpayment assistance
authorized under this will be administered by the Home Investment
Partnership Program that is referred to as HOME. HOME is an existing
grant program that helps communities nationwide expand the supply of
housing for low- and very low-income families.
The House appropriated $125 million for this program in funding year
2004 VA-HUD appropriations bill approved by the House earlier this
summer. This is an increase from the $75 million appropriated in the
funding year 2003 VA-HUD budget for the program contained in the
omnibus appropriations bill for funding year 2003 passed in February of
this year.
Unfortunately, HUD is still writing regulations for this downpayment
assistance program and has not yet released the funding year 2003
funding.
According to HUD study, entitled Barriers to Minority Home Ownership,
the overall home ownership rate is 68 percent, while home ownership
rates for African Americans and Latinos are 48 and 46 percent,
respectively. The HUD report established that one of the most
persistent barriers to minority home ownership is the lack of capital
for downpayment and closing costs.
Without going into a lot more detail, Mr. Speaker, I simply want to
say that this is a bill that will get support from both sides of the
aisle. Democrats have been advocating for a long time for these kinds
of expenditures to deal with the housing crisis in America, and so I
expect that we will have unanimous support for this bill.
Mr. Speaker, I reserve the balance of my time.
Mr. NEY. Mr. Speaker, I yield 5 minutes to the gentlewoman from
Florida (Ms. Harris), the author of the bill.
Ms. HARRIS. Mr. Speaker, I thank the gentleman for yielding me time.
Mr. Speaker, I rise to urge my colleagues to support H.R. 1276, the
American Dream Downpayment Act.
As our Nation continues to confront daunting threats both at home and
abroad, we cannot neglect the most basic security of all, and that is a
safe, clean, adequate place to live. Across our Nation, families and
individuals are consigned to deplorable conditions in substandard
housing. In a Nation that enjoys a level of wealth and material comfort
that is unprecedented in human history, this state of affairs is
unconscionable.
We have the power to address this obligation of a decent,
compassionate society today. Better yet, we can attack the housing
crisis besetting our Nation by attacking the poverty that underlies it.
H.R. 1276 constitutes the first step in fulfillment of President
Bush's plan to create 5.5 million new minority home owners by the end
of the decade. This visionary initiative will add $256 billion to the
American economy.
As I have consulted with housing advocates throughout my district, I
have repeatedly heard that a great number of low-income Americans could
meet their monthly mortgage payment, but they cannot surmount that
initial obstacle of a downpayment and closing costs. Thus, a steep
entry fee is all that stands between many low-income Americans and the
dignity, the stability, and the economic empowerment of home ownership.
The resulting home ownership gap, which disproportionately impacts
African Americans and Hispanic Americans, has staggering economic and
social consequences. Studies show that the average worth of a low-
income person, about $900, skyrockets to $70,000 when they own a home.
In 1998, owner-occupied property constituted 21 percent of all
household wealth as well as more than 71 percent of all tangible
wealth.
Moreover, the home ownership gap dramatically impacts the lives of
our children. Statistics show that children of families who own their
own home experience a 13 percent higher graduation together with a 7
percent accelerated rate in math achievement and reading recognition.
Additionally, such children complete almost one half year more of
education.
For the young people who live in homes their families own, they enjoy
a greater level of self-esteem while receiving an indispensable
educational exercise in the proper maintenance of personal property.
Mr. Speaker, H.R. 1276 empowers tens of thousands of low-income
Americans to overcome this striking inequality in our land of
opportunity. As a compassionate society, we have a moral obligation to
empower individuals and families and communities with the tools to
build their own prosperity. By authorizing a total of $400 million in
grants to communities throughout America over fiscal years 2004 and
2005, this bill will enable 80,000 low-income Americans to purchase
their first home.
As we proceed to a vote on this revolutionary bill, I would like to
recognize the Bush administration and the gentleman from Alabama (Mr.
Rogers) for their continued commitment to extending quality, affordable
housing to every American, as well as for their tremendous creativity
in developing solutions that can help us achieve this goal.
Further, I wish to express my gratitude to the gentleman from Ohio
(Mr. Oxley) and the ranking member, the gentleman from Massachusetts
(Mr. Frank) of the Committee on Financial Services, as well as my
deepest appreciation to the gentleman from Ohio (Mr. Ney) who has
assisted me daily with this bill, and the ranking member, the
gentlewoman from California (Ms. Waters) of the Subcommittee on Housing
and Community Opportunity for their outstanding leadership in
shepherding H.R. 1276 through the legislative process.
Finally, I wish to acknowledge the support of the gentleman from
California (Mr. Gary G. Miller), as well as my dear friend, the
gentleman from Arizona (Mr. Renzi) and the gentleman from Alabama (Mr.
Davis) for his extraordinary bipartisanship. Their passionate
dedication to fulfilling this moral imperative of quality affordable
housing for every American continues to inspire us all.
I would like to thank our extraordinary committee staff for their
diligence and expertise, as well as my outstanding staff member, Miguel
Romano, for his diligent work on this bill.
Today, let us reaffirm the expansiveness of the American dream by
passing this vital legislation.
Ms. WATERS. Mr. Speaker, I yield 3 minutes to the gentleman from
Alabama (Mr. Davis).
Mr. DAVIS of Alabama. Mr. Speaker, let me compliment my colleague,
the gentlewoman from Florida (Ms. Harris) as the primary sponsor of
this bill and let me compliment the chairman of the subcommittee, the
gentleman from Ohio (Chairman Ney) for his leadership on this issue.
Let me extend compliments as well to the ranking member of the
subcommittee, who is present here today, the gentlewoman from
California (Ms. Waters) and the gentlewoman from California (Ms. Lee),
who is not here.
We do a lot of things in this institution, Mr. Speaker. We argue
about a lot of issues, but every now and then we manage to find
something we agree on. Every now and then we manage to find something
that has enormous bipartisan appeal. And that is how we have arrived at
H.R. 1276. Whether it is in the district of the gentlewoman from
California (Ms. Waters) or my district or the district of the
gentlewoman from Florida (Ms. Harris), wherever you go in this country,
the American dream is very much expressed in terms of whether or not
people have a chance to own a home.
As the gentleman from Ohio (Chairman Ney) said earlier, for the
overwhelming majority of people in this country of ours, the only tool
of wealth they will ever have, the only significant assets they will
ever have is a home. We can talk about all the indices of community
engagement, from whether you vote to whether or not you mow your lawn,
to whether or not you participate in your neighborhood
[[Page H9042]]
association. The greatest correlator of community engagement is home
ownership.
We look at our economy in the last 2 years, and all of us on both
sides of the aisle would agree, if you take out the housing boom, if
you somehow remove that from our economy, we would be deep in the
throes of a 2\1/2\-year recession now.
This is very important work, and it is a compliment to the leadership
on both sides of the aisle that this bill has made its way to the
floor. And it is a compliment to the gentlewoman from Florida (Ms.
Harris) and the gentlewoman from California (Ms. Waters) that we have
arrived at a consensus here today.
I want to make a few basic points. We have a lot of unfinished work
on the housing front. No one on our side of the aisle would suggest
that this is all that needs to be done. No one on our side on the aisle
would suggest that the $200 million is the only commitment of resources
that we ought to make. But rest assured that this $200 million
commitment will result in over 40,000 low-income families receiving
help in buying homes.
I can say briefly in conclusion, Mr. Speaker, as I travel around my
district, we regularly do home ownership events, we regularly do
housing events; and I always enjoy seeing the spark that I see in
people's faces when they have a chance to finally become home owners. I
enjoy seeing the spark when they know they are going to finally realize
their piece of the American dream.
We have made this bill better. It was a good bill. We have made it a
better bill. We have made the formula for calculating downpayment
assistance a fair and better formula. We will address the unfinished
aspects of this bill related to credit counseling. We will more forward
on those fronts.
I encourage my colleagues, as I know they will today, to vote
overwhelmingly for the American Dream Downpayment Act. I am proud to be
one of the original sponsors of this bill, and I again compliment my
friend from Florida for her leadership on this issue.
Mr. NEY. Mr. Speaker, I yield 3 minutes to the gentleman from Arizona
(Mr. Renzi), a tremendous new member, but a member that has immediately
gotten to work on our Subcommittee on Housing and Community Opportunity
to help the people not only of his district, but of the Nation.
Mr. RENZI. Mr. Speaker, I would like to commend the gentlewoman from
Florida (Ms. Harris), my friend, on her substantive and important
bipartisan legislation.
H.R. 1276 will help tens of thousands of low-income Americans achieve
the dream of owning their first home. We know equity in a home is the
primary asset used by most American families to help their kids get to
college. In addition, many small business owners use the equity in
their home to borrow and start their first small businesses here in
America, to help our growing economy and to support their growing
families.
This legislation provides $200 million in grants to over 40,000 low-
income families over the next 2 years. This money will assist low-
income families with downpayments and closing costs.
Today, more than two-thirds of Americans own their home, but fewer
than half of African American and Hispanic families are home owners and
less than one-third are Native Americans. This legislation is a real
help to all families. Studies have shown that math achievement and
reading recognition levels are 7 percent higher for children with
families who own their own home, and they complete almost a half-year
more education if they have home ownership. High school graduation
rates for children with families who own their own home are 13 percent
higher than renting families.
Let us remove the obstacles and give deserving families a real
chance. Rally around the leadership shown by the gentlewoman from
Florida (Ms. Harris) and let us work together to pass this needed
legislation.
Ms. WATERS. Mr. Speaker, I yield 3 minutes to the gentleman from
California (Mr. Baca).
(Mr. BACA asked and was given permission to revise and extend his
remarks.)
Mr. BACA. Mr. Speaker, I rise in support of the American Dream
Downpayment Act, H.R. 1276, sponsored by the gentlewoman from Florida
(Ms. Harris) and of course my good friend, the gentleman from Ohio (Mr.
Ney) who happens to be a Member from that area as well. His mother
lives in Fontana. And of course our minority leader as well, who has
been very instrumental, and that is the gentlewoman from California
(Ms. Waters), in fighting to ensure that many of the poor and
disadvantaged have opportunities in many different areas. This is an
area that she is fighting for to make sure that individuals have an
opportunity to own a home for the very first time.
Right now, Hispanics and minorities are struggling to purchase homes
at a far greater rate than the rest of the Nation. In my own district,
the Hispanic ownership rate is only 59 percent. That is nearly 10
percent less than the national average, and it is 15 percent less than
the national non-Hispanic white average.
In my own district, which is 58 percent Hispanic, it has become
increasingly difficult for Hispanics to own businesses because there is
a housing boom that is causing the prices to skyrocket. In our area, we
have the majority of growth which continues to move from L.A. to Orange
County into our area, but it has become difficult for them to become
first-time home buyers.
The median housing price in San Bernardino County went from $116,000
in the year 2002 to $207,000 in August. That is a 29 percent increase.
{time} 1100
Hispanics and minorities all over the Nation are struggling to keep
up. Not only do Hispanics earn less in wages than the rest of the
population, but Hispanic unemployment is rising as well. Right now,
Hispanic unemployment is nearly 7.8.
At the same time, we have an administration that is pushing for
programs to turn Section 8 low income-housing vouchers into State
blocks. In California, and States with huge budget deficits, it will
hurt the low-income minority population because they will not be able
to rent, let alone buy a home.
But the American Dream Downpayment Act will help Hispanics and many
other minorities become homeowners. It will help low-income and first-
time home buyers make downpayments on their first home. We must make
sure we give them that opportunity.
I know what it was like because I come from a large family of 15, and
let me tell my colleagues for the very first time that my dad was able
to purchase a home, while it was very difficult, we fell under that
category, but it was important for me and for my family to have
stability. We had a foundation for the very first time. We were able to
own a home that we never owned before because we were moving from one
place or project to another project, living in the ghettos and the
projects, moving from one place to another, but instability had allowed
it.
This act will allow individuals to have that stability we need to
say, I am going to one school, I do not have to go to four, five or six
different schools as I went. It will also help increase the education
amongst the kids where they have the stability in terms of going to one
school, having their friends that are there and being able to take
pride in their home. I know what it was like, and I took pride in my
home when we had it.
Let me tell my colleagues, Mr. Speaker, I urge support of this bill.
It is a good bill, and I compliment our minority leaders and the
gentlewoman from Florida (Ms. Harris) in carrying this legislation.
Mr. NEY. Mr. Speaker, I yield 3 minutes to the gentleman from
California (Mr. Gary G. Miller), another great member of our
Subcommittee on Housing and Community Opportunity, who has been
extremely active in concerns and issues of housing.
Mr. GARY G. MILLER of California. Mr. Speaker, I really want to
commend the gentlewoman from Florida (Ms. Harris) for doing this. This
is a really, really, really good bill. I had been a builder for over 30
years in my real life before coming to government. The gentleman from
Ohio (Chairman Oxley) really has a passion for this issue. The
gentleman from Massachusetts (ranking member Frank), a good friend of
mine, has really done everything he can to look for opportunities to
really help people get into homes, and the
[[Page H9043]]
gentleman from Ohio (Mr. Ney), who chairs the Subcommittee on Housing
and Community Opportunity, just has a supervision and really looks for
things that are good.
Some would say, why are we doing this? I am a conservative
Republican, and one would say, well, why is the government getting
involved in this issue. Some real good reasons. The average homeowner
has assets totalling about $70,000. Yet the average low-income renter's
assets are below $1,000. Most of these people that are going to benefit
from this program are already on Section 8 housing vouchers or they are
in some type of government housing. So how do we create an environment
where people rely on themselves and count less on government? That is
to get them in a home.
If we leave people in Section 8 housing, they are going to be there.
They cannot get out. They do not have the downpayment, the necessary
wealth to be able to move into society, as we would say it, and have
the experience of the dream of owning a home. There is nothing like
selling a home to somebody, watching a person and a family move into
home, they have dreams, they have anticipations, they make plans for
the future.
This is a good bill. Imagine if we get a family into a home that is
now receiving government subsistence, at a point in time they no longer
need help from the government because they have acquired wealth in
their own home. When they buy that home, their rent remains consistent.
When they take and rent a home, whether it is through Section 8 or a
government home, the rent increases as the years goes by. So look at a
situation where a family moves into a home, 10 years from now, they are
going to pay a lot more than they currently pay if they are renting a
home, but if they own that home, they are paying the same 10 years from
now as they are today.
Our goal in government should be to do everything we can to create
the best economic environment we can for the citizens. The best way to
do it is to get people into their own home. There is nothing, nothing
like moving people into something that they consider their own, rather
than something they consider somebody else's they are allowed to rent.
We have a situation growing in this country that I consider the new
homeless, and these are people who have good jobs, the husband and wife
both work, the husband might be a policeman or a fireman, the wife
might be a nurse or whatever or a schoolteacher, and yet they cannot
afford to live within the community within which they work. How many
people do my colleagues know whose children were raised in a community
they cannot afford to buy a home and live within the city in which they
spent their life growing up because it has become so expensive? In many
cases, government has created so many roadblocks, they have increased
the cost of housing, that we need to look at every opportunity we have
to eliminate the roadblocks, to decrease the restrictions and to do
everything we can to move people into homeownership.
There is a huge shortage of Section 8 housing and government housing
for low-income people. People are on waiting lists, and the reason is
the people who currently live in those homes cannot afford to move up
to the next level. They are relegated to that, and we have to change
that.
This is a great opportunity. It is a bipartisan bill, and I would
strongly encourage a yes vote.
Ms. WATERS. Mr. Speaker, how much time do I have left on this side?
The SPEAKER pro tempore (Mr. Shaw). The gentlewoman from California
(Ms. Waters) has 10 minutes remaining, and the gentleman from Ohio (Mr.
Ney) has 6 minutes remaining.
Ms. WATERS. Mr. Speaker, I yield myself as much time as I may consume
to close out the bill.
Mr. Speaker, this bill is motherhood and apple pie. This is what
public policy should be about, recognizing a need and moving to place
in law some law that will indeed help those who really do need
assistance to realize the American dream. This did not start today, did
not start yesterday.
We have a lot of legislators who have worked on this. Congresswoman
Roukema is not here anymore. She worked on this, and I think we had it
in the 2003 Omnibus bill. We did not get that at that time, but it has
been revisited in this way by the gentlewoman from Florida (Ms.
Harris), and again, there will be no opposition. Truly, this is
motherhood and apple pie. Homeownership, there are so many people who
are desirous of owning their homes, who work every day but cannot
afford that downpayment.
I am pleased that we spent time in committee thanks to the gentleman
from Ohio (Mr. Ney), and Democrats were able to improve this bill
during the committee markup by offering several amendments that were
adopted, I would like to thank the gentlewoman from New York (Ms.
Velazquez), the gentleman from Massachusetts (Mr. Capuano) and the
gentleman from New York (Mr. Crowley), and even an amendment that I
offered to require targeted outreach programs. My amendment requires
participating jurisdictions to conduct outreach to people living in
public housing, Section 8 housing and manufactured housing as part of
their plan to access these dollars. That means we are taking care of
inner city, we are taking care of suburbia and we are taking care of
the rural areas. It is not just about public housing. It is about
manufactured housing, also, and so we worked to make sure that the
outreach that is done is comprehensive. This outreach will ensure more
residents will have an opportunity to share in the American dream and
break their dependence on public housing assistance.
I am also pleased that the committee report on this bill includes
report language clarifying that funds appropriated for this program
should be new money and not be offset by a reduction in HOME block
grants. Sometimes we come up with bills and we talk about the costs,
but yet we do not appropriate new money. We reduce the money in some
other pot, and we have language in this bill that will prevent that
from happening.
Mr. Speaker, owning a home also can provide a sense of security and
contribute to safer, stronger neighborhoods. A financial and personal
stake in a residence helps the residents to create a better
neighborhood where families, children and all the elderly can thrive
and enjoy a better quality of life.
I am pleased to be a part of this committee. I am pleased to work
with my colleagues on both sides of the aisle.
Mr. Speaker, I yield back the balance of my time.
Mr. NEY. Mr. Speaker, I yield 2 minutes to the gentleman from
Michigan (Mr. Rogers) who actually carried this bill, introduced it
last session, and we appreciate his support.
Mr. ROGERS of Michigan. Mr. Speaker, I thank my friend the gentleman
from Ohio (Mr. Ney) and I thank the gentlewoman from California (Ms.
Waters) for all that she has done to get this bill on the floor and her
leadership, and I thank the gentlewoman from Florida (Ms. Harris) very
much for taking charge of this bill this session and getting it to
where it was.
It was a little bit over a year ago that I stood in Detroit,
Michigan, celebrating the 100th Habitat home going up with Secretary
Martinez, and it was a great day for us. It was kind of a little bit
chilly, a little bit rainy, but the excitement, the joy, even the tears
about having that key go in that door and turning that knob was
exhilarating and exhilarated a whole community as we stood under that
tent together opening the door of that new home for that family. In
that same crowd, there were dozens of folks who were there who had a
little bit of hope to experience that very same exhilaration by
sticking that key in that door and calling it theirs, calling it their
home. We all know that there is a difference between a place to live
and a home.
That day, that particular house, built by volunteers and the family
that was going in, became a home in a community that needed all the
help it could get. It had a very low homeownership rate, and what we
found is that as we increased these number of homes, truancy went down,
crime rates went down, investment in the community, the school overall
performance went up, and that is what this bill is about, and we should
not forget it.
It is about minority ownership coming up to where it needs to be, but
it is about the very gift to the very family who is playing by the
rules, getting up
[[Page H9044]]
every day, doing the right thing, paying all their bills, putting shoes
on their children's feet, making their rent payments, making their
utility payments, and this is the one hurdle, the very one hurdle that
stops them, that puts them in the back of the tent watching somebody
else put that key in the door.
For all of my colleagues that helped do this, I thank them very, very
much. This will be a profound impact on thousands and thousands of
American families. This is an investment in our future. I want to thank
all of my colleagues for their commitment to this. I thank the
gentleman from Ohio (Mr. Ney). I thank the gentlewoman from Florida
(Ms. Harris) for her leadership and Secretary Martinez for championing
this cause.
Mr. NEY. Mr. Speaker, I yield 2 minutes to the gentleman from South
Carolina (Mr. Wilson). He and his staff have been very energetic in
support of this bill.
Mr. WILSON of South Carolina. Mr. Speaker, I rise in support of H.R.
1276, the American Dream Downpayment Act, and I want to commend the
gentleman from Ohio (Mr. Ney) for his leadership. I want to commend the
gentlewoman from Florida (Ms. Harris) for her wonderful leadership on
this issue, and then my colleague the gentleman from Michigan (Mr.
Rogers) who has from the beginning been such an important part as he
understood and eloquently explained the bill just now.
More than two-thirds of all Americans own their own home. However,
fewer than half of all African American and Hispanic families are
homeowners. For these families, one of the biggest barriers to
homeownership is the inability to afford the downpayment and closing
costs associated with purchasing a home. This legislation seeks to help
close this homeownership gap by making $200 million in grants available
to more than 40,000 first-time, low-income families to help them
achieve the American dream of homeownership.
This is especially important to the 2nd Congressional District of
South Carolina where many families would greatly benefit from this
legislation. Too often, the dream of raising your family in your own
home seems far out of reach. As a former real estate attorney, I know
firsthand the joy of working with first-time home purchasers,
especially because I worked pro bono with the meaningful Habitat for
Humanity program, along with the Home Builders Association and the
Realtors Association.
Further, the American Dream Downpayment initiative will help low- and
moderate-income families build wealth. Consider that the average
homeowner's assets total $70,000, while the average low-income renter's
assets are below $1,000. Equity in a home, the primary asset held by
most American families, is the best mechanism that families have for
wealth creation. We can use our homes to send our children to college,
to start small businesses and to build better lives.
In short, homeownership makes family stakeholders in their
communities. H.R. 1276 will increase the rights of stakeholders and
bring stability and a new revitalization to our communities. I urge all
my colleagues to support H.R. 1276.
In conclusion, God bless our troops.
Mr. NEY. Mr. Speaker, I yield 1 minute to the gentlewoman from New
York (Ms. Velazquez).
(Ms. VELAZQUEZ asked and was given permission to revise and extend
her remarks, and include extraneous material.)
Ms. VELAZQUEZ. Mr. Speaker, I would like to enter into a colloquy
with the gentleman from Ohio (Mr. Ney).
It is my understanding that, during committee consideration, an
agreement was made between the chairman and myself to incorporate the
provision dealing with financial literacy into the report on H.R. 1276.
I would like this language to be included into the Record.
Mr. NEY. Mr. Speaker, will the gentlewoman yield?
Ms. VELAZQUEZ. I yield to the gentleman from Ohio.
Mr. NEY. Mr. Speaker, I just wanted to respond, it is my
understanding and I accept the language as was just stated.
Ms. VELAZQUEZ. Mr. Speaker, that is my colleague's understanding, and
I thank the gentleman for that. I will insert that language at this
point in the Record.
The full Committee also adopted two amendments during
consideration. The first would require States and localities
to ensure that families receiving the housing assistance are
financially prepared to maintain ownership of their homes
after the purchase by requiring recipients to complete a
course of homeownership counseling. Alternatively, if this is
not feasible, grantees could provide information in advance
to grant recipients describing the risks and responsibilities
of homeownership, providing assistance in understanding the
mortgage loan process and financing options, and making
recipients aware of any homeownership counseling that is
available locally.
Mr. NEY. Mr. Speaker, I yield myself such time as I may consume.
In closing, let me just, once again, thank our chairman, the
gentleman from Ohio (Mr. Oxley) for his diligence and perseverance in
the way he has handled the committee, to produce many good products
over this session, and when it comes to housing, he has given us the
backing we needed; the gentleman from Massachusetts (Mr. Frank), the
ranking member, the gentlewoman from California (Ms. Waters), our
ranking member of the subcommittee, who has helped so much on this bill
and also to everybody again that made this bill possible.
I just want to conclude by saying it is a dream for many Americans to
have their homes, from all walks of life.
{time} 1115
We are taking a step today on the floor of this House to do that.
This is a bill that every Member of this House can be proud of. It is a
bill that they can support, and it is a bill that is going to do
something for generations to come as people establish their home, as
people are able to take care of their families and be part of their
communities in a very, very productive way.
Again, Mr. Speaker, in closing and in urging support, I want to thank
the gentlewoman from Florida (Ms. Harris), who had the desire, the
tenacity and definitely put in all the time needed to make sure that
this bill became a reality today. Without her, we would not be here
today producing this bill, which, again, will help future generations.
So I urge support of the bill.
Mr. PAUL. Mr. Speaker, the American dream, as conceived by the
Nation's Founders, has little in common with H.R. 1276, the so-called
American Dream Downpayment Act. In the original version of the American
dream, individuals earned the money to purchase a house through their
own efforts, often times sacrificing other goods to save for their
first downpayment. According to the sponsors of H.R. 1276, that old
American dream has been replaced by a new dream of having the Federal
Government force your fellow citizens to hand you the money for a
downpayment.
H.R. 1276 not only warps the true meaning of the American dream, but
also exceeds Congress' constitutional boundaries and interferes with
and distorts the operation of the free market. Instead of expanding
unconstitutional federal power, Congress should focus its energies on
dismantling the federal housing bureaucracy so the American people can
control housing resources and use the free market to meet their demands
for affordable housing.
As the great economist Ludwig Von Mises pointed out, questions of the
proper allocation of resources for housing and other goods should be
determined by consumer preference in the free market. Resources removed
from the market and distributed according to the preferences of
government politician and bureaucrats are not devoted to their highest-
valued use. Thus, government interference in the economy results in a
loss of economic efficiency and, more importantly, a lower standard of
living for all citizens.
H.R. 1276 takes resources away from private citizens, through
confiscatory taxation, and uses them for the politically favored cause
of expanding home ownership. Government subsidization of housing leads
to an excessive allocation of resources to the housing market. Thus,
thanks to government policy, resources that would have been devoted to
education, transportation, or some other good desired by consumers,
will instead be devoted to housing. Proponents of this bill ignore the
socially beneficial uses the monies devoted to housing might have been
put to had those resources been left in the hands of private citizens.
Finally, while I know this argument is unlikely to have much effect
on my colleagues, I must point out that Congress has no constitutional
authority to take money from one American and redistribute it to
another. Legislation such as H.R. 1276, which takes tax money from some
Americans to give to others whom Congress has determined are worthy, is
thus blatantly unconstitutional.
[[Page H9045]]
I hope no one confuses my opposition to this bill as opposition to
any congressional actions to ensure more Americans have access to
affordable housing. After all, one reason many Americans lack
affordable housing is because taxes and regulations have made it
impossible for builders to provide housing at a price that could be
afforded by many lower-income Americans. Therefore, Congress should cut
taxes and regulations. A good start would be generous housing tax
credits. Congress should also consider tax credits and regulatory
relief for developers who provide housing for those with low incomes.
For example, I am cosponsoring H.R. 839, the Renewing the Dream Tax
Credit Act, which provides a tax credit to developers who construct or
rehabilitate low-income housing.
H.R. 1276 distorts the economy and violates constitutional
prohibitions on income redistribution. A better way of guaranteeing an
efficient housing market where everyone could meet their own needs for
housing would be for Congress to repeal taxes and programs that burden
the housing industry and allow housing needs to be met by the free
market. Therefore, I urge my colleagues to reject this bill and instead
develop housing policies consistent with constitutional principles, the
laws of economics, and respect for individual rights.
Mr. BEREUTER. Mr. Speaker, this Member rises today to express his
support for H.R. 1276, the American Dream Downpayment Act. This bill,
of which this Member is an original cosponsor, authorizes $200 million
in grants to be made available as part of the HOME program to first-
time low-income families for downpayment assistance. This important
legislation is strongly supported by the Administration and is a
priority of the distinguished Secretary of the Department of Housing
and Urban Development (HUD) (Mr. Martinez).
First, this Member would like to thank the distinguished gentlelady
from Florida (Ms. Harris) for introducing this legislation.
Furthermore, this Member would also like to thank both the
distinguished gentleman from Ohio (Mr. Oxley), the Chairman of the
House Financial Services Committee, and the distinguished gentleman
from Massachusetts (Mr. Frank), the Ranking Member of this Committee,
for their support in bringing this measure to the House Floor.
One of the main obstacles for families who want to purchase a home is
that they do not have the resources for a sufficient mortgage
downpayment. As a response to this pressing need, this legislation
would provide downpayment assistance grants to more than 40,000 first-
time low income families.
The American Dream Downpayment Act would be administered as part of
HUD's successful HOME program which currently provides grants to states
and entitlement communities (over 50,000 in population) to use for
affordable housing. This bill authorizes $200 million in new authorized
funds to be used for downpayment assistance by states and entitlement
communities. Furthermore, this bill would preserve the flexibility of
the HOME program by allowing these states and localities to craft a
package of downpayment assistance which meets their specific needs.
Mr. Speaker, in closing, as a Member of the House Financial Services
Subcommittee on Housing and Community Opportunity, this Member strongly
supports H.R. 1276, the American Dream Downpayment Act. This Member
encourages his colleagues to support H.R. 1276.
Mr. OXLEY. Mr. Speaker, today, the House is considering H.R. 1276,
the American Dream Downpayment Act. This important legislation,
introduced by Reps. Katherine Harris and Mike Rogers, will help tens of
thousands of low-income families to achieve the American dream of
homeownership.
The nation's overall homeownership rate is at an all time high of 68
percent. However, the homeownership rate for African-Americans,
Hispanic and other non-Hispanic minorities is approximately 49 percent.
We can and must do better than this; H.R. 1276 will go a long way in
helping to close this homeownership gap.
For many families, the biggest barrier to homeownership is their
inability to afford the downpayment and closing costs. While they can
afford the monthly mortgage payments, they are unable to save the funds
necessary for the downpayment and closing costs needed to purchase
their first home. H.R. 1276 addresses this barrier by providing
communities across America with $200 million in grants, which is
anticipated to help more than 40,000 first-time low-income families to
purchase their first homes.
H.R. 1276 will be administered as part of HUD's HOME Investment
Partnership Program, an existing program that helps communities
increase the availability of affordable housing for families most in
need through grants to state and local governments. The American Dream
Downpayment Act preserves the flexibility of the HOME program, so that
states can tailor assistance to best meet the needs of local citizens.
H.R. 1276 has received the endorsement of: HUD Secretary Mel
Martinez; America's Community Bankers; Consumers Bankers Association;
Fannie Mae; Freddie Mac; Housing Assistance Council; Manufactured
Housing Institute; Mortgage Bankers Association of America; National
Association of Home Builders; National Association of Housing and
Redevelopment Officials; National Association of Mortgage Brokers; and
National Association of Realtors.
When families own their own home, they become stakeholders in their
communities. H.R. 1276 will increase the ranks of stakeholders and
bring stability and a new spirit of revitalization to our communities.
By helping families purchase their own homes, we can give them the
wealth-building opportunity that homeownership provides. Hard-working,
low-income families across the country will finally have an opportunity
to profit from both the community and economic benefits that come from
owning your own home.
In addition to the many benefits for low-income families,
homeownership helps to fuel the economy. People who own their homes
spend money for home improvements. In fact, the housing industry itself
has been one of the few bright spots in the national economy over the
last three years.
Passage of the American Dream Downpayment Act represents an important
step in closing the minority homeownership gap. I want to again commend
Representatives Katherine Harris, Mike Rogers, Chairman Ney and Ranking
Minority Maxine Waters for their hard work on this important measure
and urge my colleagues to support it.
Mr. CASTLE. Mr. Speaker, I rise today to support the ``American Dream
Downpayment Act.'' I thank Congresswoman Katherine Harris, Congressman
Artur Davis, Congressman Mike Rogers and all the members of the
Financial Services Committee for their hard work on this important
bill.
This legislation, which I am proud to have cosponsored, will help low
and moderate income families purchase their first home. As Delaware's
governor, I established a Housing Development Trust Fund that helped
more than 5,400 low- to moderate-income families become homeowners. I
am pleased to support this program which seeks to help more than 40,000
first-time, low-income families achieve their dream of homeownership.
We can be proud of the historic levels of homeownership we have
reached in this country, we must also recognize that the number of
people who pay more than half of their income in housing is also
rising. We need to make our existing government housing programs more
efficient and expand them through responsible programs that will help
our constituents realize their dreams of homeownership. Equity in a
home is the primary asset held by most American families and the best
mechanism that families have for wealth creation.
I have maintained a longstanding commitment to affordable housing and
expanding homeownership, this legislation is a positive step in
furthering that goal. Thomas Jefferson once said the happiest moments
of his life were those which he had passed at home in the embrace of
his family. Mr. Speaker, I am pleased we are working to bring that
sentiment to all Americans and I rise in support of this legislation.
Mr. NEY. Mr. Speaker, I have no further requests for time, and I
yield back the balance of my time.
The SPEAKER pro tempore (Mr. Shaw). The question is on the motion
offered by the gentleman from Ohio (Mr. Ney) that the House suspend the
rules and pass the bill, H.R. 1276, as amended.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
____________________