First-Time Homebuyers Could Get $50,000 Under New Bill
Under the proposal, the federal government would put $5 for every $1 saved by a first-time buyer for a down payment.
A new bill introduced in the Senate proposes to provide up to $50,000 in federal funds for first-time homebuyers to use towards a down payment on a house. The Homeownership Promise Act, co-sponsored by Oregon Democrats Senator Jeff Merkley and Senator Ron Wyden, would allow U.S. homebuyers to open Homeownership Promise Accounts through Community Development Financial Institutions (CDFIs) certified by the Treasury Department.
The accounts would allow savers to contribute any amount, with the federal government matching their contributions 5:1, up to a maximum of $50,000. This assistance would be available to all income levels and would be designed to help first-time homebuyers achieve homeownership. The bill also requires borrowers to complete HUD-approved housing counseling and limits them to homes priced at or below the median home in their purchasing area.
While the bill is unlikely to move forward in a Republican-controlled Congress, Democrats hope to regain control of Congress after the midterms, increasing the chances of the bill's passage. However, some experts warn that widespread down payment assistance could exacerbate rising home prices and further strain housing affordability.
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