The National Association of Realtors® and the U.S. Conference of Mayors have named Lexington, Ky., a 2009 Ambassador City for the success of two homeownership programs, Repair Affair and the Remodeling for Access and Mobility Program. The programs help low-income homeowners make much needed repairs and modifications.

RAMP and Repair Affair are initiatives of the Realtor®-Community Housing Foundation of the Lexington-Bluegrass Association of Realtors®. The foundation helps individuals achieve their dreams of homeownership

“Realtors® build communities and care as much about keeping families in their homes as they do about getting them into homes,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “The home repairs and modifications done by the RAMP and Repair Affair programs are crucial to helping area homeowners live independently and remain in their homes. These two programs have been incredibly successful and could be easily replicated in cities and towns across the country.”

Repair Affair is an annual event that helps low-income elderly homeowners with repairs to the exterior of their homes. Many elderly homeowners live on fixed incomes and often cannot afford high home maintenance costs; if conditions become unsafe, elderly homeowners may be forced to move from their homes. Since 1992, the initiative has helped nearly 600 elderly homeowners stay in their homes.

RAMP installs accessible ramps and wheelchair lifts for low-income people with mobility impairments or disabilities, providing more than 150 homeowners to date with safer, easier access in and out of their homes.

The majority of funding for the two programs is provided by an annual grant from the Lexington-Fayette Urban County Government. Repairs and modifications are completed by Realtors®, the Remodelers Council of the Home Builders Association of Lexington, and various community volunteers.

At an event today, Realtor® Len Ferber, 2009 chair of the Housing Opportunity Committee, and Realtor® Jayne Cox, NAR Region IV vice president, joined Dustin Joyce, Council for the New American City, to present the Ambassador for Cities plaque and a $5,000 check to 2009 Lexington-Bluegrass Association of Realtors® President Gale Fulton, RCHF President Karen Mundy, and Lexington Mayor Jim Newberry.

NAR and the U.S. Conference of Mayors, through its Council on the New American City, launched the Ambassadors for Cities program in 2003 to encourage cities and local Realtor® associations to form partnerships to promote affordable housing and homeownership.

Brought together by the National Association of Realtors® yesterday, representatives from various commercial real estate and community organizations and associations agreed to work together in providing policymakers with a package of principles and policy priorities to guide them in their efforts to address the current crisis in the commercial real estate credit markets.

“We are pleased that 18 organizations participated in today’s important commercial real estate industry meeting in order to identify commonalities and set priorities to present to policy makers and regulators to stabilize, strengthen and grow this important sector,” said NAR President Charles McMillan, broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth.

“The commercial real estate market represents a significant element of the nation’s economic infrastructure. Yet, over the last year the broader financial credit crisis has severely curtailed commercial real estate lending activity and brought securitization markets to a halt. Providing liquidity and facilitating lending is essential to restore confidence and stability to the industry as a whole,” McMillan said.

“Neighborhoods are built around businesses, large retail centers, office buildings and small family-run shops. The health and vitality of commercial real estate supports a strong housing market, which in turn plays a key role in the national economy. We are all connected,” he said.

Bob Toothaker, chair of NAR’s Realtor® Commercial Alliance and host of the meeting, said, “We face a liquidity crisis, the likes of which most of us have not seen in our lifetime. There is not one silver bullet to fix the huge problem, but we believe there are key steps that can be and should be taken to ensure the continued health and vitality of the commercial real estate industry.

“NAR, large brokers and allied commercial real estate partners stand ready to work with Congress, regulators and the administration to confront this crisis. We are prepared to tell our stories and share our ideas and solutions,” Toothaker said.

Toothaker emphasized the importance of a holistic approach to the current crisis in the commercial credit markets. “As a group we strongly support the development of programs and initiatives that will provide liquidity and facilitate lending in the commercial real estate finance markets. Today we all agreed to work together to educate policymakers and provide solutions that address these priority issues, which will have the greatest impact on credit availability, liquidity and investor confidence.

“We applaud efforts to improve programs, such as the expansion of the Term Asset-Backed Securities Loan Facility program and the new issue of Commercial Mortgage Backed Securities, as well as the creation of the Public Private Investment Program to promote new lending,” he said.

NAR, along with many in today’s coalition meeting, believes the success of programs and initiatives aimed at restoring liquidity and stability to the markets is intrinsically tied to and must work in conjunction with supportive federal tax policies and accounting principles that support commercial real estate lending.

According to NAR Chief Economist Lawrence Yun, commercial real estate is the hardest hit industry outside of the auto industry. “A recovery in commercial real estate always lags a general economic recovery, but with the right policy prescriptions we can recover more quickly,” said Yun.

Sales of existing homes showed another gain in May, benefiting from favorable affordability conditions and a first-time buyer tax credit, according to the National Association of Realtors®. May’s increase was the first back-to-back monthly gain since September 2005.

Existing Home Sales - including single-family, townhomes, condominiums and co-ops - rose 2.4 percent to a seasonally adjusted annual rate¹ of 4.77 million units in May from a downwardly revised level of 4.66 million units in April, but remained 3.6 percent below the 4.95 million-unit pace in May 2008.

Yun, NAR’s chief economist expected an improvement. “Historically low mortgage interest rates clearly drew buyers into the market, and housing remains very affordable even with a recent uptick in rates,” he said. “First-time buyers also are being drawn off the sidelines by the $8,000 tax credit, which is helping to absorb inventory. However, the increase in sales is less than expected because poor appraisals are stalling transactions. Pending home sales indicated much stronger activity, but some contracts are falling through from faulty valuations that keep buyers from getting a loan.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage edged up to 4.86 percent in May from a record low 4.81 percent in April; the rate was 6.04 percent in May 2008. Last week, Freddie Mac reported the 30-year fixed at 5.38 percent; data collection began in 1971.

Total housing inventory at the end of May fell 3.5 percent to 3.80 million existing homes available for sale, which represents a 9.6-month supply² at the current sales pace, down from a 10.1-month supply in April.

Yun said the appraisal problem is serious. “Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales,” he said. “In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected.”

An NAR practitioner survey in May showed first-time buyers accounted for 29 percent of transactions, and that the number of buyers looking at homes is nearly 10 percentage points higher than a year ago. “This is the time of year when we see large increases in the number of repeat buyers, who are benefitting from sales to entry-level buyers,” Yun said. “Investors appear less active, but are more prevalent in areas with large price corrections.”

The following is a statement by National Association of Realtors® President Charles McMillan:

“NAR and our 1.2 million members commend President Obama for developing a comprehensive financial regulatory reform framework. As we have repeatedly noted, it is important to have strong supervision and regulation of the nation’s financial system to ensure we never again find ourselves in this current financial and housing turmoil.

“Rebuilding consumer trust in the various markets is important to an economic recovery, and Obama’s proposed Consumer Financial Protection Agency offers the potential to regulate and protect consumers from fraud, predatory lending and other deceptive practices. We look forward to working with Congress and the administration to shape such an organization.

“NAR also appreciates elements of the proposal that will strengthen the national policy against mixing banking and commercial activities. This safeguard is in the best interest of consumers and the nation’s economy.

“Regulatory reform will be a monumental undertaking. NAR looks forward to working with our members, Congress, and the administration to craft a final product that allows for efficient, competitive, and innovative markets while providing consumers the protection they need and deserve.”

Without the Federal Housing Administration’s mortgage insurance program, a large portion of today’s home buyers would be unable to realize their dreams of homeownership. The National Association of Realtors® urged Congress today to invest resources that will ensure FHA’s continued role in stabilizing housing to stimulate the nation’s economy.

FHA’s market share has grown from less than 3 percent to more than 25 percent in a short period of time. NAR submitted testimony to the House Financial Services Subcommittee expressing support for increased FHA staffing and resources to keep up with this rising demand.

“As the leading advocate for homeownership, NAR strongly supports FHA’s single- and multifamily mortgage insurance programs, and we have worked diligently with Congress to fashion housing policies that ensure federal housing programs meet their mission responsibly and efficiently,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “FHA is now the primary source of safe affordable mortgage financing for American families. To keep up with increasing demand, FHA must expand its capabilities, but FHA has not yet received the additional staffing and other resources commensurate with its expanded role in financing mortgages.”

Realtors® have advocated strengthening oversight of and preventing fraud in FHA and other U.S. Housing and Urban Development programs for several years. Despite voiced concerns about FHA’s soundness and oversight, studies show that FHA remains financially sound and should remain so in the coming years. The FHA-approved group of lenders maintains strict oversight of loan originators.

“Since FHA has been underinvested in for a number of years, we hope Congress will act now to provide them with resources to increase staffing and invest in technological improvements. We believe provisions of what the U.S. Senate has proposed regarding FHA loans in S. 896, the Helping Families Save Their Homes Act of 2009, will be a big step in providing the type of necessary oversight now that FHA is such a major force in the market,” McMillan said. “We look forward to working with Congress and HUD to make sure that FHA continues to offer stable, affordable, safe options for home buyers across the country.”