Downpayment Toward Equity Act is legislation to address the growing concern around rising home prices, lack of access to home-buying assistance and the widening wealth and homeownership gaps throughout the United States.
The bill would provide federal grants administered through local entities to aid first-generation homebuyers with qualifying expenses toward purchasing their first home, including downpayment costs, closing costs and costs to reduce the rates of interest.
U.S. Sens. Mark R. Warner and Tim Kaine of Virginia announced their co-sponsorship of the legislation.
“Homeownership is one of the most powerful pathways to accumulate wealth, but first-generation homebuyers – predominantly people of color – still face steep obstacles to achieving it and punching their ticket to the middle class,” Warner said. “The Downpayment Toward Equity Act could serve as a powerful tool to level the playing field, close the racial wealth gap, and help more families achieve their American Dream.”
The Downpayment Toward Equity Act would administer grants of up to $20,000 to qualified first-generation homebuyers through the U.S. Department of Housing and Urban Development (HUD). HUD would have the ability to increase the grants for socially and economically disadvantaged homebuyers. States would receive 75 percent of funds each year, distributed by population, median home prices and racial disparities in homeownership, and the remaining 25 percent would be competitively awarded to CDFIs, MDIs and other nonprofit, mission-driven entities that target services to minority and low-income populations.
“I was a fair housing attorney in Richmond for nearly two decades, and I saw up close the impact that years of discriminatory housing policies had on families’ ability to purchase a home and benefit from the wealth building that comes from homeownership,” Kaine said. “While we’ve made significant progress in combating discriminatory policies since then, their lasting effects continue to be evident in the wide homeownership and wealth gaps that people of color face. The Downpayment Toward Equity Act would take a substantial step in addressing these gaps, by helping first-generation homebuyers overcome the disadvantages they face when trying to purchase a home.”
Led by Sens. Rev. Raphael Warnock of Georgia and Laphonza Butler of California, the bill is also co-sponsored by Sens. Sherrod Brown of Ohio, Alex Padilla of California and Chris Van Hollen of Maryland. Accompanying legislation was introduced in the U.S. House by Financial Services Committee Chairwoman Maxine Waters and has received enthusiastic support from housing, homeownership and racial equity organizations across the country.
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Rebecca Barnabi
