Housing Bubble
Northwest Corridor Homeownership Initiative launched
March 14 , 2003
HUD Secretary Mel Martinez joined Congressmen Mel Watt and Robin Hayes Charlotte Mayor Patrick McCrory, Freddie Mac, Bank of America, BB&T, and a coalition of public and private organizations today to call attention to the importance of strengthening America’s communities by closing the homeownership gap for minority families. Martinez, Watt and Hayes spoke at the ground breaking of a new affordable townhome project in the predominantly minority neighborhood of Lincoln Heights.
“The Bush Administration is committed to increasing homeownership, particularly among minorities, because we believe that it is an essential part of the American Dream,” said Secretary Martinez. “The benefits of homeownership for families and communities are enormous. I am proud to join Representative Watt, Mayor McCrory, Freddie Mac and others today in helping to make this dream come true for more Charlotte families.”
“The key to expanding homeownership opportunities in our community is to expand the supply of affordable housing for Charlotte's families,” said Representative Melvin Watt. “I want to thank HUD Secretary Martinez, Mayor McCrory, City Councilman Mitchell in whose district Lincoln Heights is located, and Freddie Mac for coming together with Northwest Corridor CDC and UJAMMA to bring the American Dream home to Lincoln Heights.”
“The American Dream is alive and well for everyone,” said Representative Robin Hayes. “This area of Charlotte has a thriving community and I would like to commend Secretary Martinez, local community leaders and Freddie Mac for their hard work in helping to make this affordable housing project a reality. I look forward to working closely with Secretary Martinez to continue to improve housing opportunities across the U.S. and here in North Carolina.”
“Charlotte has long been known as a City that promotes partnerships. Being able to work with many public and private partners to support the President's homeownership goals while also addressing the City's affordable housing goals demonstrates the power of partnerships,” says Charlotte Mayor Patrick McCrory.
According to a 2002 HUD report, while nearly three-fourths of white households are homeowners, less than half of minority households own their own homes. Last year, President Bush announced the American Dream Partnership, a national public-private effort to narrow the gap by adding 5.5 million minority homeowners by 2010.
As a result of today’s announcement, Northwest Corridor CDC will construct two separate townhome projects – Vantage Point and Phoenix Rising. Vantage Pointe is a 26-unit townhouse development and Phoenix Rising is a 25-unit two-story townhouse development. Northwest Corridor CDC is an experienced non-profit developer with a proven outreach and marketing campaign designed to attract first-time homebuyers in the local community. The finished homes will sell for less than $110,000.
The Northwest Corridor Homeownership Initiative is an outstanding local example of the American Dream Partnership in action. In particular, the project boosts minority homeownership opportunities by incorporating the four key elements from the President’s Blueprint plan: homebuyer education, affordable new construction, downpayment assistance, and flexible mortgage products.
“Freddie Mac is committed to opening doors to homeownership for America’s families,” said Paul T. Peterson, the executive vice president for single-family business at Freddie Mac. “We are delighted to work with Secretary Martinez, Representatives Watt and Hayes, Northwest Corridor CDC, Bank of America, BB&T and all of the other organizations to meet the President’s challenge to accelerate the growth in minority homeownership.”
The Northwest Corridor initiative is a key component of “Catch the Dream,” Freddie Mac’s comprehensive effort working with lenders to lift minority home-ownership across the nation. Freddie Mac is a key participant in the national effort to meet the goal of increasing minority homeownership set by the Bush Administration.
Charlotte’s National Model for Minority Homeownership
The new Charlotte initiative combines the new construction of affordable homes by Northwest Corridor Community Development Corporation (Northwest Corridor CDC), a non-profit developer, with free borrower counseling from Ujamma, Inc.. Bank of America and BB&T Bank are providing affordable, flexible mortgage financing. Freddie Mac, the nation’s second largest mortgage investor, plans to purchase the mortgages, ensuring a steady supply of mortgage funds for more borrowers.
The new initiative also includes special downpayment assistance through the City of Charlotte’s federal HOME and Community Development Block Grant funds. First-time homebuyers can receive up to $10,000 in down payment and closing cost assistance. The City funds are forgiven over a 10- year period.
“The Northwest Corridor Community Development Corporation is excited about the Vantage Pointe townhome development,” said Steve Washington, Executive Director of the Northwest Corridor Community Development Corporation. “And, we look forward to the opportunity to build wealth in our communities through homeownership and this new initiative by Freddie Mac.”
Only $500 Down From The Borrower’s Funds
A key component of the initiative involves affordable mortgage financing for qualified borrowers through Bank of America and BB&T Bank. As a result, homebuyers can obtain mortgages that require as little as a $500 downpayment from their own funds. Freddie Mac plans to purchase the mortgages, ensuring a continuous supply of mortgage funds for additional homebuyers.
“Bank of America has a long-standing relationship with the Northwest Corridor CDC and we are excited about the work going on there,” said Miles Vaughn, a senior vice president at Bank of America. “Our flexible financing solutions have helped make the dream of homeownership a reality for thousands of homeowners in the Charlotte area.
We are happy to support this initiative to increase homeownership and further strengthen the Northwest Corridor community.”
“BB&T continues to be committed to affordable housing for minorities and low-and moderate-income borrowers by providing predevelopment, construction and permanent financing; funding support to affordable housing counselors and certified capacity building training for non-profit developers,” said BB&T’s Chester Williams, executive vice president and director of Community Development and CRA.
“We have a long standing partnership with Northwest Corridor, the city and UJAMMA,” said Williams, who also serves as chairman of the Northwest Corridor development committee. “This public-private alliance is working well to address the long-term minority home ownership needs of Charlotte.”
Preparing Families For Long-Term Homeownership
In order to qualify for the new program, potential homebuyers must complete a pre-purchase counseling program offered by UJAMMA, Inc., a Charlotte-based counseling agency. Homebuyer counseling is critical to the success of any new homeownership effort, according to Freddie Mac. In recent research, Freddie Mac concluded homebuyer counseling could significantly reduce borrower likelihood of mortgage delinquencies or default.
In addition, UJAMMA is providing local homeownership workshops to build community awareness of the benefits of homeownership, post-purchase counseling to help new homeowners budget for energy expenses and home maintenance, and default counseling to help low- and moderate-income homeowners in financial distress.
“The American Dream is for everyone who has come to live on America’s soil, no matter how or when they came,” said Jackie Edwards Walton, executive director of UJAMMA, Inc. “We are pleased to partner with HUD, Freddie Mac, the City of Charlotte, BB&T, Bank of America and the Northwest Corridor CDC in providing homeownership education and counseling services to citizens interested in purchasing in Vantage Point and Phoenix Rising.”
The Northwest Corridor Homeownership Initiative is the latest Freddie Mac effort to expand affordable homeownership opportunities in the State of North Carolina. During the past five years, Freddie Mac has invested more than $32 billion in mortgages in the State of North Carolina -- $11.9 billion alone in the Charlotte metropolitan area.
Charlotte residents who want to take advantage of the Northwest Corridor Homeownership Initiative should contact Terrell Blackmon, Northwest Corridor CDC, at 704-378-1268.
Source: Freddie Mac
