WASHINGTON – U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) announced their co-sponsorship of the Downpayment Toward Equity Act, legislation to address the growing concern around rising home prices, lack of access to home-buying assistance, and the widening wealth and homeownership gaps in Virginia and throughout the country. 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.

“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,” said Sen. Warner. “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.”   

“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,” said Sen. Kaine. “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.”

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). Additionally, HUD would have the ability to increase these grants for socially and economically disadvantaged homebuyers. States would receive 75% of the funds each year, distributed by population, median home prices, and racial disparities in homeownership, and the remaining 25% would be competitively awarded to CDFIs, MDIs, and other nonprofit, mission-driven entities that target services to minority and low-income populations.

Led by Sens. Rev. Raphael Warnock (D-GA) and Laphonza Butler (D-CA), the bill is also currently co-sponsored by Sens. Sherrod Brown (D-OH), Alex Padilla (D-CA), and Chris Van Hollen (D-MD). Accompanying legislation was introduced in the U.S. House of Representatives by Financial Services Committee Chairwoman Maxine Waters and has received enthusiastic support from housing, homeownership, and racial equity organizations across the country, including the National Coalition for the Homeless, National Consumer Law Center, Housing Opportunities Made Equal of Virginia, Inc., Piedmont Housing Alliance in Charlottesville, VA, Habitat for Humanity International, Local Initiatives Support Corp., Mortgage Bankers Association, National Housing Conference, National NeighborWorks Association, National Fair Housing Alliance, National Association of Realtors, National Council of State Housing Agencies, National Coalition for the Homeless, National Consumer Law Center, and others.

Sens. Warner and Kaine are longtime supporters of initiatives to assist first-generation homebuyers. The senators introduced the Low-Income First Time Homebuyers (LIFT) Act to establish a program to help first-time, first-generation homebuyers – predominantly Americans of color – build wealth much more rapidly. The LIFT Act will establish a program at 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 to increase access to homeownership for millions of families.

Text of the Downpayment Toward Equity Act is available here. 

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