The Downpayment Toward Equity Act proposes up to $25,000 in financial assistance to cover the upfront costs of a home purchase for first-time homeowners.

Who is a first-time homeowner?

Hint: Some “first-time homeowners”  have actually owned a house or condo before.

A first-time home buyer is anyone who hasn’t owned a primary residence in the last three years. This leaves room for many people who are on the financial comeback trail! There are many Americans who owned a home, then sold it because of changes in their economic situation. What might make someone sell, then rent for three years, then buy again?

Relocation. Some people choose to rent for a few years before choosing to buy in a new community. Living in the new place helps people get a better idea of which location within the new area suits them best.

Short-term relocation. Some people do not want the expense of buying and selling due to a multi-year, but short term change in employment or getting a degree at a university away from home.

Divorce or the death of a spouse. People who become single may sell, then wait for the dust to settle before making their next buying decision.

Personal economic setback. Sometimes people need to sell because of economic problems. They get another shot at first-time-hood after three years of renting.

Will this really happen?

The Downpayment Toward Equity Act is a campaign promise. President Biden made the promise. He has been negotiating with the Republican-held legislature to get it passed since 2021. While not yet passed through Congress, President Biden reaffirmed it in his 2024 fiscal year budget proposal. Vice President Kamala Harris confirmed it will be included in her plan for housing if elected president.

Will all these grants screw up the real estate economy?

For those who want to examine the entire Harris economic policy, have at it! 

Looking at the housing part, the Harris Administration promises to pursue this Downpayment Towards Equity Act and also create a large program to build an additional 3 million new houses and beef up homeowner tax credits.

Experts who think the $25,000 credit won’t work cite the obvious problem of the national shortage in available housing for purchase. They are right that having more demand and no extra supply will just make prices jump up.

Therefore, the Downpayment Toward Equity Act must be passed in conjunction with a plan to build that 3 million homes in four years. One without the other will not help our first-time homebuying clients.