ABSTRACT
A frequent proposal for assisting the poor by increasing their opportunities for homeownership was implemented in 1968 when Congress enacted legislation aimed at facilitating homeownership for families in the $3,000 to $5,000 annual income range. The minimum down payment requirement for families whose incomes are less than 135 percent of the maximum income limits for admission to public housing in the area is $200. Section 101 of the Housing and Urban Development Act of 1968 added section 235 to the National Housing Act. This new section was designed to assist low-income families in the purchase of their own homes. Low-income families are in greatest need of funds to spend on education, food, and transportation. Homeownership should be provided at a cost that does not discourage or distort a low-income family's opportunity for self-improvement. The course of the section 235 homeownership program over its first two years illustrates some important aspects of the interplay between government subsidies and the private sector.
