By Eugene T. Lowe
January 12, 2004

On December 16, President George W. Bush signed the American Dream Downpayment Act into law. The program, which will be administered as part of the existing HOME Investment Partnership program, is authorized to provide up to $200 million to help homebuyers with downpayment and closing costs. President Bush signed the bill at the U.S. Department of Housing and Urban Development before a large audience, including the immediate past Secretary of HUD, Mel Martinez, and several members of Congress. Acting HUD Secretary Alphonso Jackson introduced the President.

"Today we are taking action to bring many thousands of Americans closer to the great goal of owning a home," said President Bush. "These funds will help American families achieve their goals, strengthen our communities, and our entire nation."

HUD estimates that the American Dream Downpayment Act will assist 40,000 low- income families become homeowners. To be eligible for the program, a family's income could not exceed 80 percent of the area median income. It is anticipated, based on the experience of the HOME program, that the average subsidy will be $7,500. Local governments with populations over 150,000 or those with at least $50,000 by formula will receive funding.

The program is an integral part of the administration's "Homeownership Challenge", which calls for an increase in minority homeownership by 5.5 million families by the decade. The major goal of the program is to increase the overall homeownership rate, especially that of minority groups, who have lower rates than the national average. Recent data shows that two-thirds of all Americans are homeowners, while fewer than half of African-Americans and Hispanics own homes.