WASHINGTON – U.S. Sens. Mark R. Warner (D-VA), Chris Van Hollen (D-MD), Rev. Raphael Warnock (D-GA) and Jon Ossoff (D-GA), members of the Senate Committee on Banking, Housing and Urban Affairs, along with Sen. Tim Kaine (D-VA) today introduced the Low-Income First Time Homebuyers (LIFT) Act to establish a new program to help first-time, first-generation homebuyers – predominately Americans of color – build wealth much more rapidly.  By offering new homeowners a 20-year mortgage for roughly the same monthly payment as a traditional 30-year loan, LIFT will allow them to grow equity twice as fast.   

“The number one way that middle class Americans build wealth is through homeownership, an opportunity that due to racism and structural inequality has been denied to too many families of color. Today, Black families in this country have an average net worth just one-tenth the size of their white counterparts,” said Sen. Warner. “The LIFT Act will help close the racial wealth gap by allowing qualified home buyers to build equity – and wealth – at twice the rate of a conventional 30-year mortgage.”

“Homeownership is a key tool for Americans to grow their wealth and build economic stability, but for far too many people, especially people of color, this goal remains out of reach. This is a direct result of the systemic racial discrimination that has plagued our nation’s housing policies for generations. It’s time to right this wrong and implement policies that will allow us to close this gap. I’m proud to introduce this legislation that will help all first-time, first-generation homebuyers succeed in building more wealth through homeownership with a 20-year mortgage. I’ll be working to pass this crucial bill to help bring more economic opportunity and prosperity to all,” said Sen. Van Hollen.

“For too long, too many of our neighbors have been excluded from our nation’s housing market, unable to build equity and security after buying and moving into their first home,” said Sen. Reverend Warnock. “Home equity accumulation is one of the best ways to build generational wealth for hardworking families in Georgia and across the nation, and to close the racial wealth gap. For that, I am proud to stand alongside Sen. Warner in introducing the LIFT Act, which will help to level the playing field by making it easier for first-time homebuyers to build wealth all while boosting our state and national economy.”

“This is about helping first-time homebuyers pay down their mortgages and build wealth in their homes more quickly. I'm teaming up with Senator Warner to help low-income Georgians and first-time homebuyers build generational wealth,” Sen. Ossoff said.

“As a former fair housing attorney, I have long been passionate about giving more families access to stable housing and economic mobility,” said Sen. Kaine. “This bill will help families in their pursuit of the American dream by making home ownership more accessible to first-generation homebuyers and enabling them to build equity faster. I will continue working in the coming weeks to deliver Americans historic reforms to make housing more affordable.”

The LIFT Act will establish a program at the Department of Housing and Urban Development (HUD), in consultation with the Department of the Treasury, to sponsor low fixed-rate 20-year mortgages for first-time, first-generation homebuyers who have incomes equal to or less than 120 percent of their area median income. Working through Ginnie Mae, Treasury would subsidize the interest rate and origination fees associated with these 20-year mortgages such that the monthly payment would be in line with a 30-year Federal Housing Administration (FHA)-insured mortgage. By allowing borrowers to build equity through their homes at twice the rate of a comparable 30-year loan without meaningfully increasing the monthly payment, LIFT will improve the power of homeownership for millions of families. Coupled with well-targeted down-payment assistance, the LIFT program will make meaningful progress in closing the racial wealth gap, expanding and greatly strengthening the wealth-building benefits of homeownership in communities too long left behind by our existing financial structures.

A two-page summary of the bill is available here. Text of the legislation is available here.

“The LIFT Act would be a groundbreaking new approach to help close the nation’s significant and troubling shortfall in homeownership among people of color and the associated substantial wealth racial gap.  Focusing eligibility on first-time, first-generation homebuyers would target this assistance to families and individuals most in need of assistance while also narrowing racial homeownership gaps. And the use of subsidies to make a 20-year mortgage as affordable as a 30-year loan puts homebuyers on a path to rapidly accumulate home equity while also making homeownership less risky. The proposed approach is also highly cost effective by leveraging federal subsidies to enable homeowners to build wealth over time more quickly and effectively,” said Chris Herbert, Managing Director, Harvard Joint Center for Housing Studies.

“Homeownership is the major source of wealth and assets for most American families. Senator Warner's proposed LIFT Act is a worthy initiative that can help families build equity faster and Opportunity Finance Network is pleased to endorse this legislation,” Jennifer A. Vasiloff, Chief External Affairs Officer, Opportunity Finance Network, said.

“Homeownership is the best way to build wealth, especially for lower and moderate income households and families of color, and LIFT supercharges that wealth-building. By helping homeowners get a 20-year mortgage with a lower monthly payment consistent with a 30-year mortgage, LIFT preserves affordability and supports homeownership, but also allows homeowners to rapidly accumulate equity in their homes,” said Mark Zandi, Chief Economist, Moody’s Analytics. “LIFT is among the most effective ways policymakers have to address the nation’s pernicious problem of large and widening economic disparities.”

“The Virginia Housing Alliance applauds Senator Warner’s leadership and commitment to ensuring that the wealth building opportunity of homeownership becomes a reality for many more Americans through the Low-Income First Time Homebuyers Act (LIFT Act). In Virginia, the homeownership rate for non-Hispanic white households is 73% compared to just 48% for Black households. The LIFT Act will provide a transformative opportunity to close this gap and make the American dream of homeownership a reality for thousands of first time homebuyers in Virginia,” said Brian Koziol, Executive Director, Virginia Housing Alliance. 

###