U.S. Department of Housing and Urban Development – Shaun Donovan, Secretary
Office of Public Affairs, Washington, DC 20410
HUD No. 11 FOR RELEASE
Peter True Tuesday
(202) 821-9125 October 25, 2011
HUD SECRETARY AND MAYOR REED DISCUSS NEW HOUSING
REFINANCING PLAN TO HELP UNDERWATER BORROWERS, STABILIZE
The U.S. Department of Housing and Urban Development (HUD) Secretary Shaun Donovan and
Atlanta Mayor Kasim Reed toured the Edgewood development in Northeast Atlanta to demonstrate how
the President Obama’s proposed American Jobs Act and Project Rebuild can help stabilize home prices,
revitalize neighborhoods, create jobs, and support local economies throughout the City of Atlanta.
Secretary Donovan also spoke about the new refinancing plan announced yesterday and how it will help
families who are underwater on their mortgages.
“We can do more to help American families and improve the housing market. Too many
Americans who have done all the right things - they have paid their bills and are current on their
mortgages - are still stuck in 6% or 7% mortgage because home price declines have made them ineligible
for refinancing. Yesterday we announced a series of steps which will help responsible borrowers take
advantage of today’s record low mortgage rates,” said Secretary Donovan. “These new steps will save
underwater homeowners thousands of dollars each year, and it didn’t take an act of Congress. Now we
need Congress to step up and pass the American Jobs Act. Included in the American Jobs Act is Project
Rebuild, which helps put construction workers to work rehabilitating vacant or abandoned homes and
businesses,” he added.
Yesterday, the Federal Housing Finance Agency (FHFA) announced a set of steps which will help
responsible borrowers with little or no equity in their homes take advantage of today’s low mortgage
rates. The FHFA removed caps for deeply underwater borrowers and cut costs and eliminated refinancing
fees. That means more homeowners will have the ability to refinance and save hundreds of dollars each
month. Additionally, those who are looking to refinance through this program will finally find competition
for their business from other lenders, because the FHFA has removed key frictions that have made lenders
reticent to offer new refinancing to underwater borrowers. This will mean better rates and lower costs for
borrowers. FHFA also extended the date for homeowners to take advantage of this program through
Recent HUD statistics have shown that communities with neighborhood stabilization investments
have seen 67 percent better home sale price changes, 73 percent saw better vacancy rate improvements,
and 47 percent saw better home sale and vacancy rate improvements, as compared to similar communities
without neighborhood stabilization improvements.
The State of Georgia has received over $341 million in previous neighborhood stabilization efforts
and municipalities like the City of Atlanta could receive up to $47 million in funding for Project Rebuild.
If approved by Congress, Project Rebuild would invest $15 billion in proven strategies that
leverage private capital and expertise to rehabilitate hundreds of thousands of properties in communities
across the country. Building on the successful ideas developed during the implementation of the
Neighborhood Stabilization Project (NSP), Project Rebuild would include the following innovative ideas:
• Allow for the revitalization of commercial properties
• Include For-Profit Entities to Gain Expertise, Leverage Federal Dollars and Speed Program
• Increase Support for “Land Banking”
• Create Jobs Maintaining Properties and Avoid Community Blight
Project Rebuild will create nearly 200,000 jobs nationwide and is fundamentally an investment not
just in hard hit places but also in the families who live there – the millions of homeowners who have seen
their property values decline through no fault of their own, just for being near a foreclosed property. Its
inclusion in the American Jobs Act reflects President Obama’s belief that rebuilding neighborhoods is
essential to rebuilding our economy.
HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for
all. HUD is working to strengthen the housing market to bolster the economy and protect consumers;
meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of
life; build inclusive and sustainable communities free from discrimination; and transform the way HUD
does business. More information about HUD and its programs is available on the Internet at
www.hud.gov and http://espanol.hud.gov. You can also follow HUD on twitter @HUDnews, on facebook
at www.facebook.com/HUD, or sign up for news alerts on HUD’s News Listserv.