Housing and Urban Development Secretary Mel Martinez declared Wednesday that increasing minority homeownership rates is a "top priority" of President Bush.
However, sticking close the Bush administration's overriding philosophy that the free market rules, Mr. Martinez stressed that the most effective and efficient solutions "will come from that great laboratory of competition and creativity that is the private sector."
Mr. Martinez made his comments during Ginnie Mae's third annual investor symposium in New York.
Touting Ginnie Mae as an example of how "government should be active but limited, engaged but not overbearing," Mr. Martinez argued that the company should find ways to "shift risk to the private sector and leverage private sector technologies" - such as using the Fed Wire system to facilitate the settlement of Ginnie Mae securities.
"This will allow Ginnie Mae to become more efficient" in the global fixed-income markets, "and keep the value of investor portfolios high," he said. Mr. Martinez also lauded Ginnie's developing relationships with the governments of China, Brazil, and Mexico in their efforts to develop secondary mortgage markets in those countries.
Ginnie Mae officials used the setting to announce the issuance of over $291 million of guaranteed multifamily Remic pass-through securities. The issuance, partnered with Nomura Securities International, Merrill Lynch & Co., and Utendahl Capital Partners, is expected to be completed by the end of this week, according to senior vice president Marilyn E. Carlson.
In his speech Mr. Martinez expressed concern about improving the homeownership rates among minorities in the United States. He said that though about two-thirds of Americans currently own a home, the rate of homeownership for African-Americans and Hispanics remains well below 50%.
"We can do better, and I believe that we must do better than that," he said. Mr. Martinez said the Bush administration has included funding within its current budget for two programs geared toward improving homeownership among minority and low-income families.
The first program, called the American Dream Downpayment Fund, would give low-income families help with down payments, often cited as the biggest hurdle to buying a home. Mr. Martinez did not specify dollar amounts, but he estimated that nearly 130,000 families could be helped in the first five years of the program.
The second initiative, called the Dream Tax Credit, offers an investor-based tax credit to encourage developers and nonprofit organizations to create affordable housing through building and rehabilitation. Mr. Martinez estimated that this program could spur the construction of 100,000 new homes during its first five years in operation.
Mr. Martinez's appearance came a day after President Bush named Ronald Rosenfeld as president of Ginnie Mae.
Prior to his appointment, which is still subject to Senate approval, Mr. Rosenfeld was Oklahoma's secretary of commerce. Mr. Rosenfeld was also deputy assistant treasury secretary for corporate finance from 1992 to 1993, and worked at HUD from 1989 to 1991.