Our industry's ongoing efforts to provide affordable homeownership opportunities to working families received a tremendous boost recently when HUD proposed the creation of an FHA-insured zero down-payment mortgage.

The NAHB has long advocated such a mortgage, and we are very pleased that the administration has acknowledged the need for a zero down-payment program. We believe that it can be an important tool for expanding the ranks of the nation's homeowners, particularly among minority households.

Presidential Proposal HUD estimates that about 150,000 families would take advantage of this new program each year, and that perhaps 100,000 of those households would not otherwise be able to purchase a home. Buyers would be required to qualify for the monthly payments under normal underwriting guidelines and would also be required to complete a homeownership-counseling program. Monthly mortgage payments on a $100,000 home would be about $50 more than for a regular FHA loan.

The zero down-payment program will be proposed as part of the president's budget for HUD, in which case it would be considered by Congress late in the year. It could also, however, be enacted as a freestanding authorization bill.

Enactment of this innovative program will be a priority for the NAHB this year, as we focus our efforts on expanding affordable housing opportunities for teachers, nurses, police officers, firefighters, and other moderate-income workers who represent the heartbeat of any community.

Make it work Valuable though such a program will be, in this effort a number of other things are necessary if we are to ensure that our nation's workforce can achieve the dream of homeownership.

Most important, we need a strong economy. Working families do best when incomes are rising and jobs are plentiful.

We also need a financing system with low interest rates and healthy government-sponsored enterprises that will help keep the secondary mortgage market strong and dynamic.

Sound land-use policies are equally important to the affordability equation. In many communities, the housing affordability problem is aggravated by a shortage of “buildable” land. The land-supply shortage is often the product of policies—including large-lot zoning and urban growth boundaries—established by local governments. Restrictions on multifamily housing development also contribute to the problem, and high impact fees and regulatory costs drive up the cost of housing as well. We need local governments to understand the cause-and-effect relationship between these policies and rising housing costs and to reform those policies immediately.

Finally, in addition to down-payment assistance programs such as the one proposed by the administration, we need tax credits that make rents more affordable, a homeownership tax credit, and other special programs to help families on the edge of affordability buy or rent a home that meets their needs.

All of these important measures will be priorities for the NAHB in 2004 as we take on the difficult challenge of expanding housing opportunities for America's working families and fulfilling the promise of the American Dream.