Through this Proposed Federal Legislation First-time Homebuyers Could Get $25K
Via mcall.com
Some first-time homebuyers could get up to $25,000 under a new federal plan to boost housing equity for minority communities.
A draft of the Down payment Toward Equity Act of 2021 was published and discussed earlier this month at a hearing of the House Financial Services Committee, according to the Washington Post. It differs from President Joe Biden’s proposed $15,000 first-time homebuyer tax credit, with funds available to homebuyers via a grant at closing.
If enacted, about 4.37 million people, roughly 10% of the country’s renters, would be eligible, according to Housing Wire.
The bill could help first-time homebuyers across the Lehigh Valley, where housing costs have surged during the pandemic.
A report released in March by the Lehigh Valley Planning Commission showed that the median home sale in the region slowly increased from $175,000 to $200,000 between 2015 and 2019, but the pandemic caused median home sales here to spike in one year by another $25,000.Suddenly, the ‘Wow! factor’ is everywhere: Luxury homes, high-end upgrades are making a statement in Lehigh Valley real estate
Through the legislation, buyers could receive up to $20,000 in assistance, or $25,000 in assistance if qualified as a “socially and economically disadvantaged individual.”
A “socially disadvantaged individual” is defined in the act as “those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.” An “economically disadvantaged individual” is one who meets the bill’s income requirements.
Through these definitions, individuals identifying as Black, Hispanic, Asian American, Native American or any combination would be eligible. Those not identifying as a member of those groups would need to meet the bill’s income requirements in order to qualify. MAP: Where have Lehigh Valley area home prices increased the most during the COVID pandemic? »
Below are additional eligibility requirements, explained by the National Council of State Housing Agencies:
- A first-time homebuyer is someone who has not owned a home in the past three years.
- A first-generation homebuyer is someone whose parents or guardians never owned a home, or previously owned a home, but lost it due to foreclosure, short sale, or deed-in-lieu of foreclosure and do not currently own a home.
- A person who lived in foster care qualifies as a first-generation homebuyer, too.
- The buyer must have an income at or below 120% of area median income for either the area where the home is being purchased or the area where the buyer’s place of residence is located. For buyers purchasing homes in high-cost areas, the income limit is increased to 180% of area median income.
- If eligible, buyers would need to complete a home purchase counseling program.
- If a buyer moves less than a year after buying, they’d have to pay the entire grant back. The amount the buyer would be required to pay back would decrease 20% for each year they live in the home, and there would be no penalty after five years.
Morning Call reporter Molly Bilinski can be reached at 610-820-6644 or mbilinski@mcall.com.
