The Downpayment Toward Equity Act is a proposed bill aiming to help first-time homebuyers with a grant of up to $25,000.
This money could help cover important costs like a down payment, closing costs, and reducing your mortgage interest rate, making it easier for people to buy their first home.
The program is designed to assist individuals with low to moderate incomes, helping more people achieve homeownership.
What’s the Status of the Program?
Right now, this grant is not yet available. The bill was first introduced in Congress in 2021, but it has not yet become law.
In 2023, the White House included $10 billion in funding for first-time homebuyer assistance in its budget proposal. However, it still needs to pass Congress before the funds can be distributed.
For now, those who are interested in the grant will need to wait for further updates.
Who Might Be Eligible?
If the bill is approved, the following requirements would apply:
- First-Time Homebuyer: You must not have owned a home or been on a mortgage in the last three years.
- First-Generation Homebuyer: Your parents or guardians must not have owned a home during your lifetime. However, this requirement is waived if you were in foster care.
- Income Requirements: You must earn less than 120% of the area median income. In high-cost housing markets, the limit could be increased to 180%.
- Eligible Properties: The grant can be used to buy a single-family home, condo, manufactured home, or even a small multi-unit property (up to four units) as long as you live in one of the units.
- Mortgage Requirements: You’ll need to use a mortgage backed by federal programs like FHA, VA, USDA, or Fannie Mae and Freddie Mac.
- Living in the Home: To avoid repaying the grant, you’ll need to live in the home for at least five years.
- Homebuyer Education: You must complete a homebuyer education course approved by HUD.
Alternatives You Can Explore Right Now
Even though the Downpayment Toward Equity Act is not yet available, there are other programs and loans that can help:
- Down Payment Assistance Programs (DPAs): Many states and local governments offer financial aid for down payments and closing costs. These include grants, second mortgages, or deferred loans.
- Government-Backed Loans: Programs like FHA loans require as little as 3.5% down, and USDA loans even allow for zero down payment if you meet eligibility criteria.
FAQs
- Is the $25,000 grant available now? No, it’s not available yet because the bill has not been passed into law.
- When will it be available? The timeline is uncertain. Keep an eye on updates from Congress to find out if the bill is approved.
Final Thoughts
If the Downpayment Toward Equity Act becomes law, it could be a game-changer for first-time homebuyers.
However, until then, explore other assistance programs and prepare yourself for the process of buying a home.
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