Democrats Reintroduce Bill To Boost First-generation Homeownership

Congresswoman Maxine Waters of California — the top Democrat on the House Financial Services Committee — along with with fellow Democrats Al Green, Sylvia Garcia and Ayanna Pressley, on Thursday announced the reintroduction of the Downpayment Toward Equity Act.

The bill would provide $100 billion in direct assistance to help first-time, first-generation homebuyers purchase their first home.

“Homeownership is a cornerstone of the American Dream and the most powerful tool for building generational wealth. For too long, families of color and first-generation buyers have faced insurmountable barriers to owning a home due to predatory lending, high downpayment requirements, and increasing home prices,” Waters said in a statement.

“The Downpayment Toward Equity Act will provide targeted, direct assistance to help millions of hardworking Americans finally achieve homeownership and begin to build wealth for themselves and their families.”

Waters added that the financial assistance is needed “more than ever as the Trump Administration’s reckless economic policies continue to drive up the cost of living and rip the dream of homeownership away from hard-working families.”

The specifics of the proposal include providing up to $20,000 for first-generation homebuyers and up to $25,000 for socially and economically disadvantaged homebuyers. This aims to cover down payments, closing costs and mortgage interest rate buydowns.

In addition, the act would target assistance to those most in need — specifically Black, Latino and other historically marginalized communities — to help close racial wealth and homeownership gaps.

The act also requires homebuyer education and counseling to ensure sustainable homeownership and reduce the risk of foreclosure. Funds from the act can be used in conjunction with loans through the Federal Housing Administration, U.S. Department of Veterans Affairs, U.S. Department of Agriculture, Fannie Mae, Freddie Mac and other qualified mortgage programs.

“I am proud to once again co-lead the Downpayment Toward Equity Act with Ranking Member Waters,” said Green (D-Texas). “This legislation would help address the racial wealth and homeownership gaps in this country at a time when President Trump is doing his best to exacerbate these gaps.”

The act would administer funds through the U.S. Department of Housing and Urban Development (HUD) and state agencies, with 75% of funds distributed by population, home prices and racial disparities. The remaining 25% would be competitively awarded to community-based organizations.

“Housing is a fundamental human right, but families in Massachusetts and across the country are living in a housing crisis we can’t ignore,” said Pressley (D-Mass.). “This National Homeownership Month, I’m proud to join Ranking Member Waters and my colleagues in reintroducing the [act] which will help close the racial wealth gap and affirm economic justice.”

The reintroduced bill has several other supporting stakeholders.

Nikitra Bailey, executive vice president for the National Fair Housing Alliance, said that it “has the potential to create five million new homeowners” among people who would be the first in their family to buy a home in urban, rural and suburban communities in all 50 states, Washington, D.C., and Puerto Rico.

“Passing the DTE Act would be a significant step toward addressing longstanding racial wealth and homeownership gaps while serving as a boost to the fragile housing market,” Bailey said.

The National Council of State Housing Agencies, the National Association of Realtors and Americans for Financial Reform also commended the reintroduction of the bill.