A program to make 1 million Black families homeowners by 2005 was announced Tuesday by a Black lawmakers' group, mortgage market giants Fannie Mae and Freddie Mac, major banks, mortgage companies and community groups.
New mortgages, many with special terms for low-income borrowers and those with bad credit records, could reach $50 billion under the program.
"For far too long, minority communities have been left out of the homeownership process," Rep. Eddie Bernice Johnson, D-Texas, chairwoman of the Congressional Black Caucus, said at a press conference.
Mel Martinez, secretary of the Department of Housing and Urban Development, said the new program "means 1 million more African American families who can live their American dream."
The program, called With Ownership, Wealth, or WOW, will begin next month in 20 states, the District of Columbia and the U.S. Virgin Islands. To reach prospective home buyers, there will be homeownership fairs and seminars, radio and newspaper ad campaigns, and individual credit counseling.
Homeownership among members of minority groups grew four times faster than for whites in the 1990s, yet only 46.7 percent of Black families own their homes, compared with 73 percent of white families and 67 percent for the country overall, according to HUD.
The banks and other lenders will offer a variety of mortgages with special terms that Fannie Mae and Freddie Mac have agreed to buy, and that several mortgage insurance companies will insure.
The special terms will include required down payments of as little as $1,000 or 2 percent of a home's value, mortgages at interest rates below the usual rates for borrowers with a weak credit history, a one-time reduction in interest rates for borrowers who make their mortgage payments on time for 24 straight months, and money for down payments coming from grants or unsecured loans from community groups, government agencies or employer-assisted housing programs.
The toll-free number for information about the program is 1-800-822-1669, available Monday through Friday from 8 a.m. to 7 p.m.Copyright © 2015, Los Angeles Times