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HIP, HIP, HOMEOWNERSHIP!

June is National Homeownership Month in the United States. It's an event we at HUD celebrate every year since promoting homeownership is one of our core missions and mortgage insurance provide by FHA - the Federal Housing Administration - is one of our oldest and best-known lines of business.

The FHA mortgage insurance was established in the 1930's by President Roosevelt and the Congress to open the door to ownership at a time when it was effectively barred to all but the most well-to-do American families. It's done that by requiring a smaller and easier-to-assemble minimal down-payment - 3.5 percent - than conventional mortgages and doesn't require the borrower to have a platinum-plated credit rating. The FHA insurance fund isn't backed by taxpayers, but by the premiums paid each month by its borrowers.

Over the decades FHA's proven very effective at opening the door to homeownership, especially for young, first-time and minority homebuyers. Since its inception more than 43 million families have used FHA to borrow nearly $5 trillion to buy homes. In 2019, HUD reported to the Congress, FHA mortgages financed the purchase of one out of every seven homes in the U.S., more than 80 percent of them by first-time and a third of them minority homebuyers.

It's played just as significant a role closer to home in Alaska, Idaho, Oregon and Washington. Consider the chart below:
 

STATE FHA BORROWERS
SINCE INCEPTION
$ VALUE OF FHA MORTGAGES
SINCE INCEPTION
ACTIVE FHA MORTGAGES
5/30/20
$ VALUE OF CURRENTLY-ACTIVE
FHA MORTGAGES
ALASKA 116,221 17,013,728,770 16,165 $3,711,440,041
IDAHO 292,880 29,602,802,108 47,924 $7,663,,716,688
OREGON 467,049 60,546,720,535 71,163 $15,408,481,145
WASHINGTON 1,083,043 143,716,087,126 142,693 $33,189,745,074
  1,959,193   277, 945  


Over the past 85 years almost two million families in Alaska and the Northwest have bought a home with an FHA-insured mortgage. As of May 30, 2020, in fact, there were almost 280,000 active FHA mortgages in force with a value of almost $60 billion in the four states.

That's a whole lot of "homeownership capital" and a whole lot of households. The U.S. Census Bureau estimates that the average household is comprised of 2.8 people in our Region. If all of the people living in those 277,945 FHA-insured homes lived in one place, it would be a city larger than Seattle.

But homeownership isn't just about the raw numbers, big or small. Throughout our nation's history owning the place we call home has been a fundamental part of what we mean by the American Dream. It gives you and yours a place to put down roots, to expand your social network, to become part of a larger community, to increase your wealth and to prepare and build for a smart and safe future.

Especially these days. "Of late," President Trump noted in his May 29th proclamation declaring June, 2020 as National Homeownership Month, "we have been reminded that our homes are central to our health, our independence, and the well-being of our families," he said. "In response to the coronavirus outbreak, millions of Americans have transformed their homes into safe havens, virtual workplaces, classrooms, and, most importantly, places to nurture hopes and dreams for the future." No wonder, he added, "during National Homeownership Month, we acknowledge the many benefits of secure and affordable homeownership."

So much so that early on in the COVID-19 pandemic, the President, Secretary Carson and HUD and other Federal mortgage programs moved quickly to impose a moratorium on foreclosure or eviction actions against FHA, USDA, VA, Fannie Mae and Freddie Mac mortgages held by buyers who have lost jobs or incomes because of COVID-19. We've also directed FHA-approved servicers to provide homebuyers distressed by the pandemic a period of up to 12 months of delayed or reduced mortgages payments on FHA-insured mortgages– called forbearance-when the homeowner requests this assistance.

"The health and safety of the American people is of the utmost importance to the Department," Dr. Carson said. The actions "will provide homeowners with some peace of mind during these trying times."

And make sure, of course, that the American Dream remains alive and well. "For generations," the President observed, "homeownership has sustained and empowered Americans." May it continue to do so for generations to come.

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