Cisneros Unveils Administration Plan to Promote Home Buying : Housing: The HUD secretary says the key will be removing financial barriers such as discriminatory lending practices.

The Clinton Administration’s top housing officer announced plans Friday to reverse a decade-long trend of declining homeownership, perhaps by allowing low- and middle-income families to buy into the American dream with zero-interest loans and federal vouchers that could be used to make mortgage payments.

In outlining what he called “a major new federal government initiative,” Henry G. Cisneros, secretary of housing and urban development, also declared war on discriminatory lending practices that have kept homeownership among women, African-Americans and Latinos at rates of 50% or less than those of white males.

Cisneros unveiled what he called the Administration’s “national homeownership policy” before a convention of the National Assn. of Realtors, 16,000 of whose members are meeting here.

The cornerstone of the policy is the removal of financial and discriminatory barriers that Cisneros said have contributed to a drop in American homeownership from 66% to 64% since 1980, reversing 40 years of steady increase.

Cisneros said the decline has been especially acute among adults under 35 and for young families, as well as for low-income households with children.

Central to the Administration’s new policy is a revival of the Federal Housing Administration, which Cisneros said “is finally back after years of inaction.” FHA lending for single-family homes is up 42% this year over last under the leadership of Commissioner Nicolas Retsinas, Cisneros said, and 400,000 people were able to buy a first home.

In an effort to revitalize inner-city neighborhoods, Cisneros told the audience, the Clinton Administration wants to allow residents of public housing projects to buy the homes in which they live. He recalled a recent visit to a Baltimore neighborhood called Sandtown-Winchester, which he described as a model of such a transformation.

“Several hundred residents of Sandtown recently have become homeowners of either newly built townhouses or renovated row houses, and I am deeply moved by the passionate commitment of these new homeowners, their sense of pride and mission to maintain their property and upgrade their community,” he said.

Among steps HUD is considering to help low-income residents buy homes are providing homeownership counselors, who would advise prospective buyers on buying and maintaining homes, and issuing federal vouchers that could be used to make mortgage payments, Cisneros said.

He said the agency is also looking at “a proposal to establish a ‘no down payment’ FHA mortgage insurance program” in some urban areas.

A successful program that was pioneered in Chicago and Richmond, in which HUD-foreclosed single-family units are resold to low-income buyers, is scheduled to be expanded to 22 other cities, Cisneros said.

To enable cash-strapped buyers to get down payments, he said, the Administration is also “considering allowing penalty-free withdrawals from individual retirement accounts.” He said that proposal, which could be presented to Congress next year, would allow “parents and grandparents to support the next generation of first-time home buyers currently lacking sufficient savings for homeownership.”

Also included in the housing strategy are plans to obtain private funds to subsidize housing, such as the $100 million in pension funds recently pledged by the AFL-CIO. That money, Cisneros said, would be used to leverage a total investment of $1.2 billion to build 15,000 affordable housing units in 30 cities.

Cisneros said HUD will carry out its new policies with a work force that has shrunk from 18,000 to 13,000 over the last few years and which will be cut even further. He also promised less red tape and scandal.

“Corruption and skulduggery, that goes on--and we’ve got to crack down on that,” he said in response to a complaint about his department from the audience. “We want to create an entrepreneurial ethic.”

Changing Home Prices

Median resale prices for previously owned homes in selected metropolitan areas from July through September, with percent change from 1992, based on a survey released Friday by the National Assn. of Realtors:

Area Price % chg Akron, Ohio 83,300 +6.4 Albany 111,900 -0.5 Albuquerque 102,600 +9.6 Anaheim 221,300 -5.5 Baltimore 118,900 +3.6 Biloxi, Miss. 70,600 +9.1 Boston 176,900 +1.0 Buffalo, N.Y. 80,900 -3.0 Chicago 145,900 +5.3 Denver 105,000 +7.1 Des Moines 80,200 +8.2 Eugene, Ore. 83,900 +3.7 Hartford 134,800 -5.3 Honolulu 365,000 +4.3 Houston 81,800 +1.1 Indianapolis 87,600 +3.8 Las Vegas 109,000 +2.4 Los Angeles 196,300 -6.9 Milwaukee 104,100 +4.8 Minn.-St. Paul 96,600 +4.4 New York 176,500 +0.7 Oklahoma City 65,900 +4.3 Philadelphia 122,500 +9.4 Pittsburgh 85,200 +7.2 Phoenix 90,200 +3.0 Portland, Ore. 107,700 +11.5 Riverside 135,500 -0.3 Sacramento 129,900 -2.8 St. Louis 86,700 +2.7 Salt Lake City 88,400 +11.2 San Antonio 79,400 +8.8 San Diego 177,200 -4.0 San Francisco 254,100 -1.8 Seattle 151,300 +2.6 Tucson 91,200 +11.4 Tulsa, Okla. 73,500 +7.1 Washington 161,200 +0.7 U.S. 108,400 +4.6