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FIRST LOOK AT THE $25,000 GRANT BREAKDOWN

The newest draft of the down-payment assistance bill that will provided up to $25,000 to first-time homebuyers. This is a multi generational grant assistance package aimed at not just first-time homebuyers but those whose parent are also first-time homebuyers. Tackle homeownership rates by boosting up the ability for first generation to buy homes on their own in a time when the housing market is heating up and down payment amounts are becoming unattainable for some.

This is no longer a tax credit but a true at closing funds available at the closing table for said homebuyers for their down payment and/or closing cost. The “Down Payment Towards Equity Act of 2021” legislation has now been drafted and the details are out there of what’s included and how you can qualify.

The program is currently being discussed by the House of Representatives who will discuss the details of how the funds will be issued to states based on population, the average sales price and racial imbalance of homeownership rates among black, latinos, native americans and asian americans.

Just remember this is going to have to clear both houses of Congress and this is the starting point of the bill and changes can be expected on all parts of the balance.
Here is who qualifies at the moment:

  • Home buyer grants (assistance) would be available up to $20,000 for eligible borrowers. Those borrowers who are considered to be “socially and economically disadvantaged” could qualify for an amount up to $25,000. This money could be applied to the home buyer’s down payment expense, removing a major hurdle to homeownership.
  • This bill defines a socially disadvantaged person as someone who has been “subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.” This could include borrowers who identify as Black, Asian American, Hispanic, Native American, or “any combination thereof.”
  • The down payment assistance grant program would be compatible with several different loan types, including government-insured mortgage programs like FHA and VA. Conventional home loans that are eligible to be purchased by Fannie Mae or Freddie Mac would also fall under this program.
  • Home buyers seeking a down payment grant would have to complete a housing education and counseling program. The counseling program must be offered by a HUD-approved housing counselor.
  • Those borrowers who use down payment assistance and stay in their homes for five years or more would not be required to repay the grant. Those who “stop occupying their home less than a year” after they buy it would be required to pay it back in full. The repayment requirement would decrease by 20% for each year the borrower lives in the home — and would be fully forgiven after five years.

At the time of this article that is over 4.7 Million renters who would qualify for this grant and a heft chunk who would qualify for the additional $5,000 for racial imbalance qualifications. This is a great thing for many americans and we need to pay attention as this moves forward in both houses of congress.

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