THE BLOG

Imminent Death of Down Payment Assistance for Minorities

07/23/2008 05:12 am ET | Updated May 25, 2011

At a time when the price of necessities such as bread and gas are skyrocketing and our people are struggling to meet the very basic needs of their families, the Bush Administration is trying to stick the knife in that much further in regards to housing.

It is bad enough that homeownership rates for blacks and Latinos are close the 30 percentage points below that of whites, but the housing crisis affecting our cities is threatening the vitality of neighborhoods.

We all are aware of the crisis facing millions of Americans in the housing industry. The housing market bust was brought on by the Wall Street "fat cats" and speculators who sold our people fraudulent mortgages like the predatory drug dealers on the corners of some of our streets -- steering our people toward sub prime loans for years, even when they could afford prime rates. In fact, an African-American or Latino family is twice as likely to receive a sub-prime loan as a white family.

This bust has slowed the American economy, wrecked havoc among the financial and banking markets and more importantly limited the ability of the average working class family to achieve the American dream of owning their own home. Many neighborhoods in our cities are being left abandoned, as the yards are un-kept, the drug dealers move in, and our children's future is put at risk.

The irony is that as our nation's leaders in Congress and the Bush Administration try to solve the problem... some are attempting to kill Down Payment Assistance -- preventing hundreds of thousands of African-American, women heads of household and Hispanic families from utilizing one of the few ways they can achieve the American Dream

This is not a government hand out, no, private down payment assistance-usually funded by non-profits, was started in OUR community. It grew out from a $5,000 loan from a small Baptist church in Sacramento, CA -- that church created the largest black CDC in America -- Nehemiah Corporation of America. Since the Nehemiah program assisted those first church going families, Nehemiah and other organizations have assisted in giving the gift of homeownership to over one million families in the past 10 years.

The Bush Administration is trying to kill this program -- Kill Down Payment Assistance -- before it leaves office. WHY? No one really knows. They say it will strengthen FHA -- strengthen it for whom? Definitely, not black and brown families! Because in reality killing down payment assistance will weaken the FHA and thereby lessen the number of loans the FHA will be able to insure, which in turn will lessen the numbers of blacks, Hispanics and women that have access into homeownership.

In fact, the cover-up is that if down payment assistance programs are eliminated, over 40 percent of black families and 35 percent of Latino families that use Federal Housing Administration loans will be barred from the program. Neither the Bush Administration nor their Republican Senate cheerleaders will confess to that fact. The opportunity for homeownership and wealth creation for millions of minorities will be gone.

By effectively blocking millions of minority and women headed households access to homeownership, the Bush administration is relegating them to either, live on the rental plantation or to drive them back into predatory sub-prime financing -- making banking industry financial backers happy.

While at the same time setting the next generation of African-American and Latinos back -- the children of those down payment assistance families could use the future equity in those homes for college or start a small business. Home equity accounts for nearly 90 percent of black homeowners' total net worth. So, as the housing market collapses, much of the new wealth that has accumulated in black communities during the Clinton Administration will disappear.

The Republicans for years have told people of color to put away the tin cup, get off the government dole, lift yourself up, and stop eating the government cheese. When we do, when a program comes along that is not funded by government, but a black church -- and it leads us towards homeownership and wealth creation -- what does Bush and the Republicans try to do---steal it away so they can attack us some more.

Our opponents claim that if you do not have a down payment then those in our community are "not ready" for homeownership. "Not ready" is code for we are not done making money off you yet. Being told that we are not ready is the reason there is such a difference in black wealth/white wealth in this country today.

Again, these are families that are qualified for a FHA insured loan but just need a little help (avg. $1,500) with their down payment, because while they can afford the monthly mortgage payment, the Bush economy of high gas prices, high food costs and falling wages has destroyed their ability to make enough to save for a down payment.

When did America's policy change to end the American dream? Every president has preached the gospel of homeownership---it stabilizes neighborhoods, lifts generations out of poverty and creates better futures for our children.

In addition, mind you, NONE of the mortgages that are assisted with down payment is sub-prime loans, the overwhelming majority of these families do not foreclose on their homes.

So in affect while the government spends billions to make sure that sub-prime gurus like Countrywide's leader Anglo Mozilo can make $130 million a year and bail out the industry...its trying to kill to one of the few proven methods that try help real Americans?

So, what are our Democratic leaders in the Senate doing? Just going along with the Republicans instead of standing up for what is right.

For a family starting out that does not have savings, FHA with down payment assistance is the only remaining option in successfully buying a home. Killing programs now when prices are falling is stupid. Now is the time for young families to get a better deal to ensure that they can have a little slice of the American dream in this downtrodden economic time?

Some members of the Congressional Black Caucus and Congressional Hispanic Caucus have been fighting to ensure that the down payment industry stays alive during the negotiations in Congress on Housing. Congress and President Bush have no right to impugn the abilities of African-Americans, women, Latinos and other minorities to purchase their own home.