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Clinton's partnership for homeownership.

I admire the work that mortgage bankers do in making the American dream a reality for millions of households every year. As governor of Arkansas, I have worked for nearly 12 years to support your efforts to promote homeownership and affordable housing, by easing the regulatory barriers to development, by keeping property taxes and impact fees among the lowest in the 50 states, by helping to build the needed highways and other infrastructure and by aggressively issuing mortgage revenue bonds through the Arkansas Development Finance Authority.

As Thomas Jefferson predicted two centuries ago, homeownership has been a cornerstone of the success of our democratic, free enterprise system. By creating a true public-private partnership, in the 1950s, the United States became the first country in the world where homeowners were the majority of households, and not just on farms, but in small towns, cities and suburbs from coast to coast. Public policy and private industry worked well together for several decades to establish and expand vital institutions to support home building and housing finance, including the FHA, VA, Fannie Mae, GNMA, Freddie Mac, HUD, FmHA, the Federal Home Loan Bank System and more. To reinforce these initiatives, tax incentives, such as the home mortgage interest deduction, also played an important role in encouraging homeownership.

Some of these once-proud institutions have recently endured significant budget reductions and experienced other administrative problems. Homeownership in America reached its all-time peak in 1980 and then declined during the 1980s for the first time since the 1930s. Of even greater concern is the more dramatic fall in the rate of homeownership for young households under the age of 35, which decreased from 44.5 percent in 1980 to 37.8 percent in 1991. These are the types of prospective first-time buyers who traditionally have been helped most by the federal housing programs.

Equally disturbing is the deep economic recession in home building, homebuying and residential values. Housing starts have dropped almost in half since the late 1970s and also are down significantly from the most recent peak year in 1986. Indeed, 1991 was the worst year for housing construction since 1945 and the second straight year that development of new single-family homes fell below one starts. Home sales have declined by nearly 25 percent since 1988 and residential property values have also been stagnating or falling in many areas of the country.

I am deeply committed to reversing the decline in homeownership, home building and homebuying. My goal is to make affordable housing a reality for all of our citizens, particularly our young families. I strongly support raising the maximum FHA mortgage limits to 95 percent of a metropolitan area's median house price. One recent U.S. Census study found that three million Americans who are now priced out of the homeownership market could afford to buy a moderately-priced home with the help of FHA mortgage insurance. A Clinton presidential administration will work actively to revitalize the Federal Housing Administration's single-family and multifamily mortgage insurance programs by modifying closing cost and underwriting rules and administrative practices. We intend to put FHA and HUD back in business again. Similar reforms will be applied where needed to Veterans Administration and Farmers Home Administration mortgage programs. Our goal is to reach out to the private sector for advice and cooperation in making all federal agencies and government-sponsored enterprises as useful as possible in expanding homeownership and housing affordability.

To further these efforts, I strongly support maintaining the key federal income tax incentives for homeownership and affordable housing, including the mortgage interest deduction. In addition, I advocate making permanent and expanding the federal authorization for state and local mortgage revenue bonds and the low-income housing tax credit. Through my proposed multi-billion dollar Rebuild America Fund to invest in our nation's economic future, I will eliminate the bias against new construction that currently exists in the HOME program and I will make it easier for local private developers to combine government subsidies from CDBG, HOME, tax credits and other sources.

I will make sure that our federal fiscal, monetary and regulatory policies are designed to maximize the success of the private sector in building, financing, selling and managing our nation's housing stock. In addition, I intend to work closely with private industry to ensure that foreclosed homes owned by the Resolution Trust Corporation, HUD, FDIC and other agencies are sold as affordable housing and genuinely expand opportunities for homeownership. Ten percent of these properties should be made available for non-profit groups to convert into housing for the homeless. We will also support special programs for low-income ownership of private and public housing, adequate maintenance and modernization and tenant participation in the management of government-assisted homes, increased rental subsidies, enterprise zones, fair housing and a nationwide network of community development banks. Homeownership and housing markets will be revived and strengthened through our broad-based initiatives for economic and community development, infrastructure and transportation, health care and social services, law enforcement and anti-crime programs.

To make all this possible, I will work tirelessly to improve the nation's economy and strengthen our position as a winning competitor in the global marketplace. My national economic strategy for Putting People First and Rebuilding America is designed to substantially increase jobs, incomes, investment, construction and development. We will reverse the downward slide of the last three years that has left the nation with the slowest economic growth since the Great Depression. I intend to restore our country to economic dynamism and a vigorous, growth-oriented future.

Affordable housing, homeownership, home building, home sales, home mortgages and home values can and will once again be the rising tide to lift all of America's boats. I pledge to end the divisive rhetoric and politics of the past decade and bring together the housing, finance and urban development groups to work in partnership with government, as President Truman did in 1949 when Congress first declared the national goal of "a decent home and a suitable living environment for every American family."

Arkansas Governor Bill Clinton is the Democratic candidate for President.
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Title Annotation:Executive Essay; Bill Clinton
Publication:Mortgage Banking
Date:Oct 1, 1992
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