A National Homeownership Month Spotlight on Biden’s American Rescue Plan Initiatives
Biden Addresses the COVID-19 Housing Crisis
Thanks to President Biden’s recent proclamation, kicking off National Homeownership Month, discussion in the media has finally begun to focus on homeownership equality issues in a way it has not done in decades. During the tumultuous Trump years, media attention was largely (and rightfully) focused on the never-ending stream of shocking comments and actions, and the repercussions of Trump’s non-stop and systematic dismantling of consumer protections and civil rights.
This year’s National Homeownership Month proclamation by President Biden is nearly the polar opposite of last year’s Trump declaration. In 2020, Trump’s proclamation focused intensely on the deregulation of the housing finance industry, under the guise of the government “getting…out of the way of responsible homeownership and reforming our housing finance system.” This, of course, resulted in a less-regulated industry going back to the same tactics employed in prior years, where poor and minority Americans were disproportionately denied access to homeownership through a wide variety of “shadow redlining” methods. An already barely-regulated industry was given a free pass during the Trump years, and the result was the lowest percentage of Black and Hispanic homeownership since the creation of the Fair Housing Administration in 1934.
Fast forward to 2021, and the Biden Administration is taking the exact opposite approach. Rather than getting “out of the way” of banks and the real estate industry and hoping for the best, the Biden Administration is well aware that regulation, oversight, and accountability are needed if we are to truly ever see equitable housing opportunities in the United States. When left to their own devices, when counting on these industries to self-regulate, the results are always disappointing at best, and downright maddening at worst, when the brazen discrimination and predatory tactics of banks and other creditors emerge into the public eye. Biden’s proclamation not only elaborates on the value of homeownership in creating generational wealth and financial stability, it calls upon government agencies to pick up the mantle of fair housing and actually institute policy changes.
This section of Biden’s proclamation says it all: “We also know that people of color continue to face discrimination in our housing market—when trying to secure mortgages, to have their homes appraised, and to live in neighborhoods where their families can thrive. In recent years, the homeownership gap between Black and white families reached its widest point since 1968, when banks could still legally discriminate against borrowers based on the color of their skin.”
It is no small matter that the highest office in the land has chosen to call out the root causes of homeownership inequality and the ensuing wealth and income disparities that result from housing and banking discrimination. To people who suffer this discrimination on a regular basis, Biden’s statement is common knowledge. However, poor and minority Americans are well aware that for any real change to occur to the status quo, White and wealthy Americans must be aware of housing injustices and use their power and status to address these issues in honest and realistic ways.
The results, so far, show real promise. With Biden’s leadership, as well as his challenge to American businesses and institutions to work together to make substantive changes to business practices that leave so many poor and minority Americans locked out of the realm of homeownership, new rules and regulations were enacted by several key government agencies in an effort to affect real change.
HUD Comes Out of Hiding
After four years of former Secretary Ben Carson slinking around behind the scenes and systematically dismantling the progress of previous administrations, the Office of Housing and Urban Development has awoken under the leadership of Biden-appointed Secretary Marcia Fudge.
On June 10th, HUD restored the Affirmatively Furthering Fair Housing (AFFH) requirement that had been dismissed during Secretary Carson’s Trump-appointed tenure. In essence, the rule seeks to “take affirmative steps to remedy fair housing issues such as racially segregated neighborhoods, lack of housing choice, and unequal access to housing-related opportunities”
The good news is that HUD, with its oversight power largely going unused in recent years, is now on the forefront of the push for fair housing, and has dedicated $5 billion to create affordable housing opportunities for poor and minority Americans.
This allocation of money from the American Rescue Plan of 2021, combined with the new initiative being spearheaded by Secretary Fudge focused on homelessness, proves that HUD is ready to step up and take on some of the biggest causes of housing inequality in the United States. It is a welcome sight to see grown-ups in the room who are actively taking on the bad actors locking underrepresented Americans out of homeownership and all its benefits.
The Department of Agriculture Digs In
In a rare turn of events, even the Department of Agriculture (USDA), under the leadership of Secretary Tom Vilsack, jumped into the fray, simultaneously releasing a statement on June 1 to celebrate National Homeownership Month. Secretary Vilsack, also using monies made available through the American Rescue Plan of 2021, outlined an initiative to address the lack of affordable housing in rural American communities.
According to Vilsack, “Safe, energy-efficient, affordable housing is essential to the vitality of communities in rural America. The American Rescue Plan is providing critical relief to rural homeowners and helping to keep more Americans in their homes. USDA is committed to using our resources to help support healthy, resilient and more equitable communities through homeownership.”
Since 1949, the USDA has helped some 4.7 million families purchase or retain housing in America’s many rural communities, with a variety of home mortgage and home improvement loan programs designed to allow rural Americans to join the ranks of homeowners and contribute to their communities in meaningful ways.
The Consumer Financial Protection Bureau Rises Again
Having been neutered throughout much of the Trump era, the CFPB is retooling itself under the leadership of Acting Director David Uejio in an effort to help Americans who have suffered severe economic distress during the COVID-19 pandemic. The new proposed rule, “Regulation X,” seeks to add further protections against eviction and foreclosure for Americans who have fallen behind in their mortgage or rent since the advent of the pandemic.
Under the proposed rule, not only will banks be required to take additional measures prior to foreclosure to assure homeowners can catch up on delinquent payments by being “evaluated for loss mitigation before the initiation of foreclosure,” but all pending foreclosures will be required to do a “pre-foreclosure review” until December 31, 2021.
If passed, this rule will undoubtedly save millions of homeowners facing foreclosure from having to undergo the costly and traumatizing experience of losing their homes to banks. According to the proposal for Regulation X, some 2.1 million Americans were found, as of January 2021, to be 90 days or more behind on their mortgage payments. This rule seeks to force banks to do their due diligence prior to formally initiating the foreclosure process, with the hopes that borrowers and lenders can come to repayment agreements to keep homeowners in their homes.
Though the rule has yet to be passed, there is a lot of promise in the proposal, as the CFPB shows that not only are they spearheading this proposal, but the Federal Housing Finance Agency (FHFA), Federal Housing Administration (FHA), Department of Veterans Affairs (VA), or Department of Agriculture (USDA) have also expanded their forbearance programs beyond the minimum required by the CARES Act.
In short, this National Homeownership Month is unlike any others that have come before. While the country has lived through two recessions since President Clinton first established National Homeownership Month, we have never seen anything as swift and devastating to the economy—other than the Great Depression—that endangered so many homeowners and renters.
At AHP 75, our initiative to raise homeownership levels to 75% for all Americans was created with the same goals in mind as these government agencies. We seek to bring underrepresented groups into the ranks of homeownership, as well as to help keep homeowners at the risk of foreclosure in their homes through a suite of services offered by our ally companies.
With micro mortgages as low as $5,000, and up to $100,000, AHP 75 is committed to helping aspiring homebuyers to purchase homes in America’s most affordable communities.
This National Homeownership Month, if you or someone you know aspires to become a homeowner, visit our website to see how we can help you onto the path of homeownership and financial stability.
Are you ready to become a homeowner? Visit AHP75.com to learn about our homebuyer programs designed specifically to help you join the ranks of homeowners and get onto the path of financial stability and wealth generation.
Aaron Morales is the Social Justice Writer for AHP 75, based out of Chicago, IL.