House OK's $400m bill to aid in down payments

By Associated Press, 10/2/2003

WASHINGTON -- Up to 40,000 low-income families will get financial help in making down payments on their first homes under legislation passed yesterday by the House.

The American Dream Downpayment Act, passed by voice vote, is an administration-backed initiative aimed at helping families, particularly in minority communities, who are able to meet monthly mortgage payments but don't have funds for the down payment and closing costs associated with home loans.

The White House said the legislation would reduce a disparity in homeownership -- three-fourths of non-minority Americans own their own homes but less than half of blacks, Hispanics, and other minorities are homeowners.

The bill, said Representative Katherine Harris, Republican of Florida, the chief sponsor in the House, "empowers tens of thousands of low-income Americans to overcome this striking inequality in our land of opportunity."

Supporters said children of homeowners do better in school and have higher high-school graduation rates than the children of renters, and that this new group of homeowners would boost the US economy.

The program, to be administered by the Home Investment Partnerships Program in the Housing and Urban Development Department, provides $200 million a year over the next two years in grants to state and local governments. Each low-income family would be given an average of $5,000 to be used toward the down payment and closing costs on a first home. The bill must still be considered by the Senate.