National Homeownership Month FACT SHEET:
Secretary Fudge Prioritizes Access to Homeownership, Sustainability for Existing Homeowners and Narrowing the Racial Wealth Gap
June marks National Homeownership Month, a time to highlight efforts to help families achieve affordable and sustainable homeownership. HUD Secretary Marcia L. Fudge has made it a central priority to help families realize the dream of homeownership.
A home is more than four walls and a roof. It is our bedrock-a place that serves as a bridge to greater opportunity and a better life. A home can connect us to better jobs, more affordable transportation options, and communities with cleaner air and cleaner water. It is a place that can help build wealth that can be passed down to generations to come.
The dream of homeownership-and the security and wealth creation that comes with it-is out of reach for too many Americans. This is especially true in the wake of the economic devastation brought on by the COVID-19 pandemic and the shortage of available affordable housing inventory.
We know that families of color have been systemically locked out of buying homes and continue to face discrimination in our housing market when trying to secure mortgages, having their homes appraised, and living in neighborhoods where their families can thrive. In recent years, the homeownership gap between Black and white families reached its widest point since 1968, before the Fair Housing Act became law.
Many communities remain profoundly segregated by race, with opportunities far greater in white neighborhoods than in communities of color. Households of color have also been disproportionately impacted by the economic downturn the pandemic caused, having higher unemployment rates, incidents of sickness and death, and falling behind on household expenses like rent and mortgage payments.
HUD is committed to supporting sustainable and affordable homeownership opportunities to help more low- and moderate-income and first-time homebuyers who want to move from renting to owning. We are vigorously enhancing tools and resources to make affordable FHA-insured mortgage financing more accessible to those who need it most.
Delivering Relief to Homeowners Impacted by COVID-19. On his first day in office, President Biden took executive action to extend foreclosure moratoriums for nearly 11 million households with mortgages guaranteed by the Federal Government. Following the Biden-Harris Administration’s introduction and passage of the American Rescue Plan, HUD introduced streamlined options for relief for homeowners and continues to work with the Department of Treasury to implement nearly $10 billion in relief for homeowners who have fallen behind on their mortgage payments during the pandemic. During Homeownership Month, the Federal Housing Administration introduced additional measures to help homeowners during the pandemic, including extending the foreclosure moratorium for all FHA-insured single family mortgages through July 31, extending the initial forbearance request timeframes, providing additional relief to seniors with Home Equity Conversion reverse mortgages, and providing new mortgage payment recovery options for those most in distress.
Removing Barriers to Homeownership for Those with Student Loan Debt. The Federal Housing Administration (FHA) updated its policy on student loan monthly payment calculations to remove barriers and provide more access to affordable single family FHA-insured mortgage financing for creditworthy individuals with student loan debt, which has disproportionate impact on communities of color. The updates removed the previous requirement that lenders calculate a borrower’s student loan monthly payment of one percent of the outstanding student loan balance for student loans that are not fully amortizing. The new policy bases the monthly payment on the actual student loan payment, more closely aligning FHA policies with industry standards.
Advancing Fair Housing. The Biden-Harris Administration announced actions to end discrimination in the housing market. More than 50 years since the Fair Housing Act’s passage, access to wealth through homeownership remains persistently unequal. In his first week in office, President Biden issued a memorandum directing HUD to address discrimination in our housing market. Secretary Fudge is taking critical steps towards realizing the President’s directive. HUD has published both its proposed rule on countering housing practices with discriminatory effects and its interim final rule on the legal duty to Affirmatively Further Fair Housing in the Federal Register. These rules will align federal enforcement practice with the Fair Housing Act’s broad remedial purpose to end discrimination in housing. Together, they will provide the legal framework for HUD to require private and public entities alike to rethink established practices that contribute to or perpetuate systemic inequality in housing and recognize and address longstanding fair housing issues in our communities.
Improving Homebuyer Assistance Programs. The President’s FY2022 HUD budget proposal makes clear that housing is foundational to building a strong, more secure America. The FY2022 HUD budget includes a $100 million set-aside for Secretary Fudge’s new initiative, the FirstHOME Homebuyer Assistance initiative, which provides funding to States and insular areas – unincorporated territories of the United States – to support sustainable homeownership.
Developing New Programs for First-Time Homebuyers. The FY2022 HUD budget also includes funding to pilot new FHA programs intended to lower barriers to homeownership for potential first-time homebuyers. These FHA-insured loans may be paired with assistance from the FirstHOME initiative to increase initial equity for first-time homebuyers and further the aim of sustainable homeownership.
Taking Action to End Racial Bias in the Housing Market. On June 1st in Tulsa, President Biden announced that Secretary Fudge will lead a first-of-its-kind interagency initiative to address inequity in home appraisals. The effort will utilize, quickly, the many levers at the federal government’s disposal, including potential enforcement under fair housing laws, regulatory action, and development of standards and guidance in close partnership with industry and state and local governments, to root out discrimination in the appraisal and homebuying process. These are the kinds of policies and practices that keep Black families across the nation from building generational wealth through homeownership. A 2018 Brookings study found that homes in majority-Black neighborhoods are often valued at tens of thousands of dollars less than comparable homes in similar-but majority-White-communities. And the crisis is worsening: a recent study found that the gap between the appraised value of homes in predominantly White neighborhoods compared to comparable homes in predominantly Black and Latino neighborhoods nearly doubled between 1980 and 2015.