|The House Financial Services Committee voted last Thursday afternoon to favorably report legislation, the Downpayment Toward Equity Act (H.R. 4495), that would establish a grant program to provide down payment and other home purchase assistance to underserved home buyers. NCSHA supported the legislation, which was introduced by Committee Chair Maxine Waters (D-CA), and worked with committee staff to strengthen it.
The bill would authorize $100 billion over 10 years in total appropriations for the new program, which would be administered at the federal level by the U.S. Department of Housing and Urban Development (HUD). HUD would distribute 75 percent of the funding appropriated each year to state housing finance agencies (or another agency in the state HUD deems appropriate), based on a formula that takes into account the number of potential home buyers who would be eligible for assistance under the bill in each state and area median home prices. The other 25 percent would be awarded on a competitive basis to Community Development Financial Institutions, Minority Deposit Institutions, and other eligible entities.
The funds could be used to help “first-generation home buyers,” defined as those whose parents have not previously owned a home or whose parents experienced a foreclosure and who have not themselves owned a home in the past three years; those who have lived in foster care also would qualify. Eligible expenses include down payment assistance, closing cost assistance, and interest rate reductions. Funds also could be used to finance pre-purchase modifications needed to make a home accessible for the buyers or members of their household.
At the urging of NCSHA, the version of the bill advanced by the committee includes language that would allow for grantees to use a portion of funds for administrative expenses, up to a limit imposed by HUD. The original version of the bill allowed grantees to use five percent of program funds for administrative expenses, an amount NCSHA felt was too low to allow the program to operate successfully. Allowing HUD to set the limits for administrative expenses will allow for a more flexible standard that can be more easily adjusted as the program develops.
NCSHA has summarized the bill in more detail here.
The committee advanced H.R. 4495 on a party-line vote of 28–23, with all Democrats present voting in support and Republicans present opposed. Waters and other committee Democrats argued the legislation is necessary to address the impacts of redlining and other discriminatory practices and would help minorities and other underserved borrowers realize the dream of homeownership. Ranking Member Patrick McHenry (R-NC) and other committee Republicans countered that the legislation would actually make housing more expensive by driving up housing prices and chided committee Democrats for not advancing ideas that would directly combat inflation.
It is unknown at this time whether the full House of Representatives will consider the legislation.
The committee also favorably reported several other housing related bills, including the Housing Fairness Act of 2022 (H.R. 68), which would expand federal efforts to prevent housing discrimination; the Grandfamily Housing Act of 2022 (H.R. 3111), to establish a $100 million HUD grant program for owners of intergenerational housing to help them offer and coordinate services for intergenerational families; the Public and Federally Assisted Housing Fire Safety Act of 2022 (H.R. 7981), to require the installation of hardwired or tamper-resistant battery-powered smoke alarms in federally assisted housing; and the Housing Temperature Safety Act of 2022 (H.R. 6528), to mandate that owners of federally assisted rental dwelling units install temperature sensors in such units.