Beatty Bipartisan Bill Building Legislative Momentum

Statement

Today, the Financial Services Subcommittee on Housing, Community Development, and Insurance held a hearing entitled, "A Review of the State of and Barriers to Minority Homeownership," to explore options to reduce economic and societal barriers that African-Americans and other minority Americans face before, during, and after the homebuying process. At the hearing, U.S. Congresswoman Joyce Beatty's (OH-03) Housing Financial Literacy Act of 2019, H.R. 2162, was identified by the Subcommittee as a proposal that would assist Americans afford, purchase, and stay in their homes.

"Right now, too many Americans lack the basic knowledge and know-how to fully understand the long-term financial obligations and implications of purchasing a home," Beatty said. "Motivating first-time homebuyers to seek vital pre-purchase counseling and equipping them with the much-needed financial skills and tools to make informed financial decisions benefits their families, the surrounding neighborhood, and the entire U.S. economy." Beatty continued, "I am pleased to see that my bill is gaining traction, and I am hopeful the full Committee will act on this important piece of legislation in the very near future."

The Census Bureau reports that the minority homeownership rate is 47.7 percent, while the white homeownership rate stands at 73.6 percent. Currently, the minority homeownership rate is at its lowest level since 1968--the same year the landmark Fair Housing Act was signed into law. Moreover, according to the Urban Institute, an average African-American family lives in a neighborhood that is 35 percent white and 45 percent African-American and the average white family lives in a neighborhood that is 75 percent white and 8 percent African-American. Overall, low-income African-American families are three times more likely to live in a neighborhood experiencing extreme poverty.

Last month, Beatty reintroduced the Housing Financial Literacy Act of 2019, a bill aimed at increasing first-time homebuyers' financial knowledge. If enacted, the bill would give first-time homebuyers who complete a Department of Housing and Urban Development (HUD)-certified housing counseling course a discount on their Federal Housing Administration (FHA) mortgage insurance premium of 25 basis points (or 0.25 percent).

Studies confirm that homebuyers who receive pre-purchase housing counseling are nearly one-third less likely to fall behind on their mortgage and thereby face a reduced risk of foreclosure. H.R. 2162 is currently cosponsored by Congressman Steve Stivers (OH-15) and is awaiting further consideration by the House Financial Services Committee.

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