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Gov. Gregoire, legislative leaders invest to increase housing security

For Immediate Release: December 17, 2007

SPOKANE – Gov. Chris Gregoire, Senate Majority Leader Lisa Brown and Speaker of the House Frank Chopp today proposed investing $57.5 million to boost housing security in Washington.

“Washington families should be able to live close to good jobs and schools, in safe neighborhoods and safe structures,” said Gov. Gregoire. “Our proposal will help people who are in need of affordable housing, fund successful programs to help homeless families transition to stable permanent housing, and provide assistance to those who own a home but are in danger of foreclosure.”

The governor’s 2008 supplemental budget invests $57.5 million in housing programs, including education programs and counseling services for Washington homeowners seeking to buy a home or struggling with the threat of losing their home; homeownership programs for low- and moderate-income first-time homebuyers; and the Housing Trust Fund, which helps communities meet the housing needs of low-income and special needs populations.

Gov. Gregoire will release her full supplemental budget proposal Dec. 18.

“In this holiday season, all of us wish our neighbors a happy new year,” said Sen. Brown. “We’re going to work very hard to make that wish come true by doing all we can to make affordable, comfortable, secure housing available for everyone in our state.”

The governor’s supplemental budget proposal includes:

• $1.5 million for education and counseling to help homeowners. In September 2007,
Gov. Gregoire formed the Task Force for Homeowner Security to evaluate instability in the national subprime mortgage market and ensure that the impact of this national trend is minimized in Washington. Based on the work of this group, the Governor and legislative leaders will propose funding to set up education and counseling services for families affected by the current mortgage crisis.

• $50 million from the capital budget to expand the Housing Trust Fund. Additional funding will be included for the Housing Trust Fund, which helps communities meet the housing needs of low-income and special needs populations through different strategies. Up to $10 million is earmarked for low-income housing for areas hit hardest by recent floods and for short-term loans to purchase property for low-income housing.

• $6 million to expand the Washington Families Fund. The Washington Families Fund is a public-private partnership to expand affordable housing for homeless families in Washington. Services that are provided by the fund, such as job training, childcare and domestic violence counseling, can make the difference between a successful transition to permanent housing and repeated episodes of homelessness.

The Housing Trust Fund has a proven record of turning our investments into opportunities,” said Speaker Chopp. “Since its inception in 1986, the HTF has helped build, preserve or rehabilitate more than 32,000 housing units for low-income people in Washington state.”

The Governor and legislative leaders will also propose items that do not require additional state funding to help with housing issues. These include:

• Helping low- to moderate-income people purchase a home. The Washington State Housing Finance Commission (WSHFC) helps low- and moderate-income homebuyers purchase their first home through mortgage and down payment assistance. Legislation will be introduced to increase WSHFC’s debt limit from $4.5 billion to $6.5 billion so more projects can be funded.

• Adding protections for homeowners. The Department of Financial Institutions is preparing legislation to implement more of the Task Force for Homeowner Security recommendations. These recommendations include establishing standards and borrower protections for nontraditional mortgage products and in the promotion of new procedures to be used during loan initiation and in case of borrower default. These new policies will further protect homebuyers from unscrupulous lenders who may lead buyers into loans that are not in their best interests.

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