Housing / Construction

- Overview -

The President has repeatedly said that the health of the housing industry is of critical importance to the Nation's well-being. During his Administration, he has made a strong commitment to assist the recovery of the housing industry by:

• Authorizing $13 billion in mortgage purchases by Government National Mortgage Association for the purchase of home and multi-family project mortgages at below-market interest rates.
• Curtailing the excessive Federal spending that has required heavy borrowing from the private sector in order to reduce interest rates for home mortgages.

In his State of the Union message for 1976, President Ford candidly noted that 1975 was a disappointing year in the housing industry. But he also pointed out:

". . . the housing industry is improving. With lower interest rates and available mortgage money, we can have a healthy recovery in 1976."

To spur that recovery, President Ford directed HUD to provide housing assistance for 975,000 families, over a two year period (FY 1976-77) programs which will expand housing opportunities, spur construction, and help to house moderate and low income families. To reach this

• 400,000 low income families will be provided subsidies under a rental housing program through FY 76; 400,000 additional families will be provided with subsidies in FY 77, including 125,000 units of new construction or substantial rehabilitation. This "Section 8" program will pay the difference between percentage of family income and the rent charge the landlord.
• Mortgage subsidies will be approved for an additional 175,000 families in FY 76-FY 77 with moderate incomes to help them buy newly constructed or substantially rehabilitated homes, under the revised Section 235 homeownership assistance program.

Note - July figures for housing starts were: 1,387,000 (at seasonally an adjusted rate) up 15% above rate of 1,207,000 for July 1975.

• On September 15, 1976, President Ford initiated a program to reduce down payments on lower and middle-priced housing by up to 50%. The President's proporal [proposal] will lower the monthly mortgage payments in the early years of home ownership and then, increase them as a family's income rises.

HOME OWNERSHIP

Improving the quality of housing available to low and moderate income families is one of the key objectives of President Ford's housing policies.

Past emphasis on building large Federal Housing projects for direct rental to poor families--projects that in many cases soon were plagued by vandalism--has been replaced with the rent supplement program. By relying on the private sector for the construction, financing and maintenance of housing for lower income families, these families are given more freedom of choice in seeking a place to live.

Moderate income families have seen an increase in the maximum Federal Mortgage Insurance they can get toward the purchase of a new home.

The President has sought to pursue economic policies, including tight control of unnecessary federal spending, to hold down inflation, reduce interest rates, cut taxes, increase purchasing power and thus, make available more funds for home mortgages.

President Ford's home purchase policy has sought to make available to homeowners the mortgage credit they need at reasonable interest rates, and to moderate extreme swings in mortgage credit availability.

The President recently announced an accelerated homeownership program that would:

• reduce down payments on FHA loans for lower and middle price houses by up to 50%.
• accelerate implementation of a new Federal Guaranty Program to lower monthly payments in the early years of homeownership and gradually increase them as family income increases.

URBAN COMMUNITY DEVELOPMENT

President Ford is committed to returning more power to State and local authorities to deal with their local problems, free from unnecessary Federal red tape.

In one of his early actions as President, signifying major progress toward this goal, President Ford signed the Housing and Community Development Act of 1974.

This Act, along with the General Revenue Sharing Program, forms the cornerstone of the President's urban policy and marks a complete and welcome reversal in the way the Federal government tries to help urban communities solve their problems. Local officials are provided the resources to deal with the particular need of their communities as they think best instead of being told from Washington exactly what they must do.

Under the new approach:

• A single block grant for community development replaces seven rigid categorical grant programs such as model cities and urban renewal.
• The President's budget provides $3.25 billion for block grants in 1977, about $450 million more than in 1976 and nearly a billion dollars more than the $2.47 billion provided for the old categorical programs in 1972.

President Ford demonstrated his concern with the growing problems facing many older cities when he established, on June 30, 1976, a Commission on Urban Development and Neighborhood Revitalization to recommend to him, by October 1, ways to revitalize urban areas and neighborhoods. HUD Secretary Carla Hills is chairman of the Commission.

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