A former home builder now has turned his efforts to rebuilding the Department of Housing and Urban Development (HUD).
“I want to be a powerful advocate for housing,” said Andrew Cuomo, who is proud that he is the first secretary of HUD with experience as a home builder.
Speaking at the annual convention of the Mortgage Bankers Association of America (MBA), Cuomo recalled his residential construction experience: “I built 12 projects with 1,000 residential units.”
Rebuilding HUD, though, is a more formidable job.
“In the past, HUD was almost a joke. It was inefficient and ineffective. Now we have a blank slate to reinvent it. We’ll bring in new talent and expertise–not just more paper pushers. There will be no tolerance for waste, fraud and abuse.”
Cuomo, the son of former New York Gov. Mario Cuomo, took the job as housing secretary earlier this year. He spoke at the opening session of the MBA convention, which was attended by some 4,600 members of the association that represents the real estate finance industry.
Marc Smith, incoming MBA president, commented on Cuomo’s coming impact: “I’m optimistic that he’ll respond to the needs of lenders and brokers.”
Cuomo outlined a series of reforms to fix the bureaucracy that still has some offices using rotary dial telephones:
– New technology will help to increase the efficiency of the department that has been downsized by half in the last 10 years.
– The Federal Housing Authority (FHA) will adopt an automated underwriting system.
– The FHA will move from 81 small offices to four Homeownership Centers with state-of-the-art equipment.
“All roads lead to homeownership at HUD,” said Cuomo, emphasizing that the nation is on track to reach President Clinton’s goal of achieving the highest homeownership rate in history by 2000.
“We’ll get there if the economy stays strong, with the deficit down and interest rates remaining low.”
The national homeownership rate rose to 65.7 percent in the second quarter of this year, the highest rate in 17 years.
Cuomo said that 67 million American households own homes, the largest number in U.S. history.
The rate of ownership in the cities is 50 percent, while it is 72.6 percent in the suburbs.
Cuomo noted that people are coming back to the cities: “Suburbs can’t go on forever. Sprawl is expensive and takes a toll on the environment.”
He added that minorities and immigrants represent potential new markets for housing.
Homeownership for minorities is 45.7 percent, while the rate is 72 percent for whites. Female-headed households have a homeownership rate of 51.3 percent.
“We must continue making special efforts to reduce the gap in homeownership between whites and minorities, between households headed by women and others and between our cities and suburbs,” Cuomo said.
The number of homeowners has increased by 3 million since 1995.
In other initiatives, Cuomo announced:
– President Clinton has asked him to chair the new Partnership for Advancing Technologies in Housing (PATH), which has the purpose of bringing down the cost of home construction by introducing new technologies and increasing energy efficiency.
– In January, HUD will launch the Secretary’s Awards for Excellence in Housing to recognize the best design, best planning and best construction in the affordable housing industry.
– HUD is working on legislation to streamline both the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act.
“We hope to have a RESPA reform bill delivered to Congress by early next year,” Cuomo said.
