Clinton offers to shave $200 off FHA home loan closing costs Dole camp derides first-time savings as 'chump change'

June 07, 1996|By Carl M. Cannon | Carl M. Cannon,SUN NATIONAL STAFF

WASHINGTON -- In another overture to the middle class, President Clinton announced yesterday that his administration will cut $200 off closing costs for Americans who buy their first homes with mortgages backed by the Federal Housing Administration.

"Anybody who's willing to take the risk and who can make the mortgage payments to buy their own home, it seems to me we ought to do what we can to help," the president said.

The change would benefit about 100,000 first-time buyers each year, HUD officials said, and would cost about $20 million a year, a cost they said would be offset by savings in other FHA operations.

It was the second goody package offered to middle-class voters by the administration this week. On Tuesday, speaking at Princeton University's commencement, Clinton unveiled a two-year $3,000 tax credit for students, aimed primarily at those attending community colleges.

"It's been American dream week: college educations and home ownership," said Mike McCurry, the White House spokesman.

The campaign of Clinton's Republican rival, Bob Dole, derided the $200 savings as "chump change." The Dole campaign argued that this figure falls far shy of how much all homeowners could have saved -- through lower interest rates -- if the president had simply signed the Republican balanced budget proposal.

"Since Bill Clinton slammed the door shut on a balanced budget this January, mortgage rates have jumped by a full percentage point, costing the average homeowner an additional $918 in interest payments each year," said Nelson Warfield, Dole's campaign spokesman.

Rep. Rick Lazio, a New York Republican, amplified on this theme, citing a study by the National Association of Realtors that estimated that on a $100,000 home, a family could save $65,000 over a 30-year loan if the Republican plan to cut spending and balance the budget were approved.

"Hard work and a good economy help Americans buy their own homes, not White House speeches," said Lazio, chairman of a House subcommittee on housing. "The administration doesn't want to talk about the driving force behind broader homeownership: lower interest rates."

Yesterday's sniping underscored what events all week have shown: Almost anything -- college tuition costs, Medicare actuary tables, closing costs on houses -- can be made into a partisan issue in an election year.

Just as Dole chose a family in Chesapeake, Va., on Tuesday to illustrate his point that the budget deficit is a "stealth tax," the president yesterday trotted out a Michigan couple to dramatize his point about the importance of lowering closing costs.

The couple, Lisa Kasten, 24, and her husband, Spencer, 25, recently bought their first home, a small century-old wood-frame house, for $57,000.

"Our home is definitely no mansion, but to us it's the most beautiful house in the world," Mrs. Kasten told Clinton on the White House South Lawn. "Couples like us, all around the country, will benefit from what you're doing."

The president noted that 3.7 million more Americans own homes than when he took office and said he wants to more than double that figure in four years.

"We've got a lot of work to do, but we can do it," he said. "I want

to have 8 million [more] Americans be able to say two of the most beautiful words in the English language: 'Welcome home.' "

The Dole campaign, complaining that yesterday's announcement was a thinly disguised campaign event, wrote a letter to the Department of Housing and Urban Development, demanding to know whether taxpayer money was being spent to finance such "political road shows."

HUD Secretary Henry G. Cisneros bristled at the suggestion that there was anything political in yesterday's announcement. He noted that the administration's goal has been to lower the average sum paid during FHA closings from $4,400 to $3,400 and that yesterday's decision completes that process.

Unlike the tax proposal that Clinton unveiled Tuesday, yesterday's announcement does not require congressional approval and should take effect by Sept. 30, HUD officials said.

"I notice that the Dole spokespeople have already responded and called this 'chump change,' " Cisneros said. "Well, it may be chump change to folks who work on exorbitant consultant fees or political salaries, but reducing the up-front costs of housing by $200, $1,000, is very significant to people in America."

The president recalled the days when he was one of those first-time buyers who watched his pennies as he reminisced about his own first home, which cost $20,500.

Asked by a reporter if it was time to buy another one -- and specifically if he expected to be in the housing market next year -- the president laughed and replied, "I hope not. I hope I've got a little time on that."

Pub Date: 6/07/96

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