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HUD's New Rule Crushes the American Dream and Threatens African American Economic Empowerment

By Bishop Harry R. Jackson Jr., Senior Pastor, Hope Christian Church, Beltsville, MD

CBC Mortgage Agency is partnering with Communities of Faith to promote prosperity through homeownership and investment in Distressed Communities. CBC Mortgage Agency is supportive of the President’s urban empowerment agenda. And now it is under attack.

CBC Mortgage Agency (CBCMA) provides homebuyers with down payments to buy houses with mortgage loans insured by the Federal Housing Administration (FHA). Over the last four years, CBCMA has helped more than 14,000 American families in 49 states achieve homeownership. More than half of those families – 54 percent – are minorities, and CBCMA itself also is minority-owned. A federally chartered corporation, CBCMA is owned by the Utah-based Cedar Band of Paiutes, a federally-recognized Indian tribe.

In January, CBCMA launched its UHOUSI Initiative, a focused effort to work with African American churches to promote family and community stability through responsible homeownership. In his blog entitled Everything Begins at Home, ( Pastor Phillip G. Goudeaux noted that:

“… I believe that faith, love, hope, discipline, values, morals, wisdom and knowledge should all begin at home. In fact, in many respects, everything begins at home. That’s also why I believe in homeownership. Homeownership is a “centerpiece” of economic development and urban renewal, particularly for African Americans. That’s why my church is partnering with CBC Mortgage Agency (CBCMA) to launch the UHOUSI Initiative. The UHOUSI Initiative is an effort to increase responsible homeownership among African Americans, other minorities and millennials. …Historically, programs and policies that truly empower people, especially minorities, to achieve economic self-sufficiency have often fallen prey to the covert and ulterior motives of those in power who, for whatever reason, derive benefit from oppressing others.”

It now appears that Pastor Goudeaux’s blog was “prophetic.”

On April 18, the U.S. Department of Housing and Urban Development issued a letter that effectively puts CBCMA out of business without notice. Simply put, the letter said that CBCMA could now only make loans on tribal lands or to its tribal members, a limit that, in the words of one Cedar Band member, appears to be an effort to “put Indians back on the reservation.”

Forced to protect itself, CBCMA immediately sued in federal court to stay the new rule and seek court intervention on numerous Constitutional and statutory grounds. Based on this suit and other industry concerns, HUD has delayed the effectiveness of the letter until July 23, 2019.

Many racial challenges facing this country stem from our massive disparity in wealth. White households enjoy 12 times the net worth of African American households, a disturbing gap that grows wider by the day. While nearly three out of four whites own homes, the African American homeownership rate is 41 percent – the lowest it has been since 1968.

A primary reason for this disparity is that unlike many whites, African Americans typically lack intergenerational wealth to assist their children with the most important purchase of their lives, buying a home. As a result, government policies that hinder effective programs like down payment assistance perpetuate a system that is leaving many African Americans in a permanent, renting underclass. As a matter of law, the Federal Housing Administration (FHA) allows families and friends to provide down payment help. Again, as Pastor Goudeaux notes in his blog, most of our congregants to do not have family or friends who can do this.

I don’t know how we got here but I do know that we can’t stay here. CBCMA and its UHOUSI Initiative are a critical component of President Trump’s agenda to work with the African American faith community to bring prosperity and economic development to our communities. More importantly, CBCMA’s assistance is available on equal terms to all Americans without regard to race or geography. HUD’s action has immediately put at risk the homeownership hopes of hundreds of deserving people nationwide. These include more than 30 members of my congregation who are in the homebuying process now as the result of the UHOUSI Initiative homebuyer event at my church in March.

On a related note, HUD’s action threatens CBCMA’s efforts to collaborate with the Trump Administration and the faith community on the strategic use of Opportunity Zones to develop and preserve affordable and workforce housing in communities at risk of displacement and gentrification. CBCMA is the “launch” investor of a unique investment fund model known as Workforce Housing Opportunity Fund. The model uses investment funds to help community-based organizations – including affiliates of inner-city churches – acquire, develop, rehabilitate, and preserve affordable housing in urban communities that are a risk of gentrification.

I say, let us reason together. We acknowledge HUD’s commitment to reduce risk in the FHA mortgage insurance fund in order to continue to provide homeownership opportunities to low- to moderate-income homebuyers. CBCMA has proven it endorses that mission by serving as the only large down payment assistance provider that provides post-purchase counseling to homebuyers.

Now is not the time to step backwards. We are better than this and the faith community needs more partners like CBCMA that are committed to its constituencies and mission. Please join us in asking HUD to revisit its decision and work with CBCMA to ensure that it continues to help our people prosper and our communities become more stable and secure.

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