activity was up a distressing 81% in 2008.
If NSP does not get in front of this trend, wewill be unable to deal with the consequences.
Program funds should be linked to programs that ensure that people who have lost homesin foreclosure have the opportunity to buy homes they can afford at interest rates that arereasonable.
In addition to already-existing criteria, NSP should prioritize saving and rehabilitatinghousing located near other opportunity structures – jobs, public transit, good schools, etc.
2. Stimulus money should focus on building homeownership opportunities for thepoor and other disadvantaged communities.
Homeownership built the middle class, and home equity accounts for the majority of assetwealth of the typical middle class family. In addition to making families more financially stable,homeownership makes communities more stable by securing residents and establishing taxrevenue.Unfortunately, not everyone has the same access to homeownership. Because of historic andpresent-day discrimination and exclusion, people of color have significantly lowerhomeownership rates than Whites. Unfair lending practices, at the heart of the current crisis,have pushed the dream of homeownership further out of reach for many people of color. Forexample, Black and Latino mortgage seekers earning over $350,000 per year were more likely tobe offered a subprime loan than White mortgage seekers earning under $50,000 per year.
States should ensure that lower-income people can take advantage of low home prices and the home tax credit to become homeowners and get on the road to asset development.
The stimulus legislation includes a tax credit for homebuyers buying a primary residence. Asmany as 1 million home sales could result from the tax credit, according to Mary Trupo of theNational Association of Realtors. Unfortunately, not all homebuyers will benefit equally. Totake full advantage of the credit, buyers would have to earn enough to use it and spend at least$150,000 on a home.
The National Low Income Housing Coalition points out that, since the money comes as adeductible tax credit, homebuyers must earn enough to pay taxes to get any benefit and as muchas $81,900 per year for a family of four to get the full benefit. However, the median income fora Black or Latino family was only $40,000 in 2007.Additionally, when the home costs less than $150,000 the deduction is only worth 10% of thehouse's value, meaning that those buying the cheapest homes wouldn't receive the full benefit.
Lower-income families could be given an opportunity to buy homes if government findscreative ways to use CDBG funds to support their access to homeownership opportunities.