Make 2005 the best year for real estate ownership

Pledge To Make 2005 Your Year for Home Ownership

by Lew Sichelman

Alphonso Jackson, Secretary of the Department of Housing and Urban Development, suggested a new year's resolution last month that may not be nearly as tough to realize as many people think. And better yet, once you reach his proposed goal, it should be much easier to maintain than keeping off a few extra pounds or working out more often.

We're talking about real estate ownership, a goal to which practically every family in America aspires.

Owning the a home isn't for everyone. Some folks don't want the responsibility, while others don't want to give up the freedom of being able to pick up and move, whether across the street or across the country, almost at will.

But if you hanker to put down some roots, give your kids a place to grow and prosper, become part of a community and build a little nest egg, owning your home instead of renting it from someone else should be one of your top priorities.

"As long as you have a steady salary, good credit, and few long-term debts, purchasing a home is probably within your reach," Sec. Jackson said in a pre-Christmas message. "And by taking things one step at a time, you'll find that buying a home can be a very manageable process."

As the nation's housing agency, HUD is committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws.

Although Johnson eventually became one of the company's vice presidents, he never made more than $14,000 per year. But despite his relatively low salary, Johnson dedicated a portion of every paycheck to investing. And by his 90th birthday, Johnson had accrued nearly $70 million in real estate. Today, Johnson's legacy lives on through a scholarship foundation he created before his death.

Johnson's story is not typical, but it illustrates the idea that accumulating wealth can lead to a better quality of life, Jackson said. And as the nation's top housing official, he understands full well that wealth accumulation through homeownership is the key to financial independence and self-sufficiency.

"Homeownership brings countless benefits," he said. "When you make a house payment, you're building equity, which is an investment in your family's future. Owning a home can qualify you for tax breaks that actually lower your monthly out-of-pocket costs. And homeownership provides the kind of freedom, stability, and security that is attainable in few other ways."

Sec. Jackson said that want-to-be buyers are often surprised to learn they don't need all that much money to buy their first homes. He also said there is plenty of guidance available for those who are having trouble navigating their way through what can be a bewildering maze of forms and an unending number of difficult decisions."Down payments for homes are less intimidating than you might think," the HUD official said.

"Only a few years ago, conventional loans required 10 to 20 % down on the purchase of a home. Today, down payments are significantly lower, and with good credit, you may qualify for an FHA-backed loan that only requires a down payment of 3 percent."

There are plenty of other options available, too; some with little or nothing down. And some rookie purchasers may even be eligible for help with their down payments and closing costs through HUD's new American Dream Down payment Initiative.

"Purchasing homes is one of the most important steps families can take toward realizing the American dream," Sec. Jackson said. "So for 2005, consider making a resolution to buy your first home. HUD and our partners are here to help ensure that this is one resolution you keep."