New $25,000 Down Payment Grant Could Help First-Time Homebuyers
Buying your first home is a big deal! Saving up enough money for a down payment is often the hardest part. But a new bill called the Downpayment Toward Equity Act of 2023 is a first-time homebuyer grant with the aim of making things a little easier for people buying their first home (or who have not owned in the previous 3 years).
What is the Downpayment Toward Equity Act?
The Downpayment Toward Equity Act is a bill in Congress that would give up to $25,000 in cash to eligible first-time homebuyers. This grant could be used to cover the down payment, closing costs, or other expenses that come up when you purchase a home.
For many first-time buyers, coming up with even a few thousand dollars for a down payment can be really tough. This first-time homebuyer grant would help make homeownership possible for more people who are trying to buy their first home.
Who could get the $25,000 grant?
To get the full $25,000 first-time homebuyer grant, you would need to meet a few requirements:
- You must be a first-time homebuyer who has not owned a home in the past 3 years. This program is for true first-timers!
- Your income must be below a certain limit based on the median income in your area. They want this grant to help lower- and middle-income buyers.
- Your parents or legal guardians must not have owned a home in the past 3 years. This ensures the money helps “first-generation” homebuyers.
- You have to get an FHA, VA, USDA or other government-backed mortgage. These mortgages are easier to qualify for.
- You need to complete a homebuyer education course so you understand the homebuying process. This will set you up for success!
- You have to live in the home as your primary residence for 5 years. This encourages long-term ownership.
Why is this grant available?
This program aims to help more Black and Hispanic families buy homes. Today, most wealth comes from homeownership, but Black and Hispanic families often face barriers to buying their first home. This grant would help close that gap.
The grant also helps “first-generation” homebuyers whose parents never owned. Buying a first home is hard if your family never went through it! This grant levels the playing field.
When could the Downpayment Toward Equity Act happen?
The Downpayment Toward Equity Act was introduced in Congress in June 2023. It still needs to be voted on. If it passes, funding would need to be set up, which takes time. Most experts think the grant could roll out sometime in 2023 or 2024 if it becomes law.
What if I need money for a down payment now?
Since this grant isn’t available yet, look into other options like the Conventional 97 mortgage from Fannie Mae or down payment assistance programs in your state or city. Collecting grants from a few different programs can help you buy sooner!
Buying a home for the first time is a big step. Save up what you can for a down payment and learn about different programs that may help. The $25,000 Downpayment Toward Equity first-time homebuyer grant could help a lot of first-time buyers realize their dreams if it becomes law!
Check out this video that explains this bill and the eligibility requirements in more details!