[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4495 Introduced in House (IH)]
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117th CONGRESS
1st Session
H. R. 4495
To provide downpayment assistance to first-generation homebuyers to
address multigenerational inequities in access to homeownership and to
narrow and ultimately close the racial homeownership gap in the United
States, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 16, 2021
Ms. Waters (for herself, Mr. Green of Texas, Ms. Pressley, Mr. Garcia
of Illinois, Ms. Garcia of Texas, Mrs. Axne, Mr. Cleaver, Ms.
Velazquez, Mr. Lawson of Florida, Ms. Ocasio-Cortez, Ms. Tlaib, Mr.
Torres of New York, Ms. Williams of Georgia, Mr. Auchincloss, Mr. Lieu,
Ms. Lee of California, Mr. Sires, Ms. Clarke of New York, Mr. Evans,
Mr. Espaillat, Ms. Moore of Wisconsin, Mr. Blumenauer, Ms. Norton, Mr.
Bowman, Ms. Ross, Ms. Schakowsky, Ms. Sanchez, and Mr. Vicente Gonzalez
of Texas) introduced the following bill; which was referred to the
Committee on Financial Services
_______________________________________________________________________
A BILL
To provide downpayment assistance to first-generation homebuyers to
address multigenerational inequities in access to homeownership and to
narrow and ultimately close the racial homeownership gap in the United
States, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Downpayment Toward Equity Act of
2021''.
SEC. 2. FIRST-GENERATION DOWNPAYMENT ASSISTANCE DOWNPAYMENT PROGRAM.
(a) Establishment.--The Secretary of Housing and Urban Development
shall carry out a program under this Act to provide grants to States
and eligible entities to provide financial assistance under this Act to
first-generation homebuyers to assist them with acquiring owner-
occupied primary residences.
(b) Allocation.--After reserving amounts as required under sections
6(d) and 8(b), any remaining amounts made available to carry out this
Act shall be allocated as follows:
(1) States.--75 percent of such amounts shall be allocated
among States in accordance with a formula established by the
Secretary, which shall take into consideration--
(A) adult population size (excluding existing
homeowners);
(B) median area home prices; and
(C) racial disparities in homeownership rates.
(2) Eligible entities.--25 percent of such amounts shall be
made available only to eligible entities on a competitive
basis.
(c) Assistance.--Amounts from a grant under this Act shall be used
only to provide assistance--
(1) on behalf of a qualified homebuyer; and
(2) for--
(A) costs in connection with the acquisition,
involving an eligible mortgage loan, of an eligible
home, including downpayment costs, closing costs, and
costs to reduce the rates of interest on eligible
mortgage loans;
(B) for subsidies to make shared equity homes
affordable to eligible homebuyers by discounting the
price for which the home will be sold and to preserve
the home's affordability for subsequent eligible
buyers; and
(C) for pre-occupancy home modifications required
to accommodate qualified homebuyers or members of their
household with disabilities.
(d) Amount.--A grant of assistance under this Act--
(1) may be provided on behalf of any qualified homebuyer
only once; and
(2) may not exceed $20,000, or $25,000 in the case of a
qualified homebuyer who is a socially and economically
disadvantaged individual, except that the Secretary may
increase such maximum limitation amounts in the case of
qualified homebuyers acquiring residences located in high-cost
areas, as determined based on median home prices or prices of
residences under a shared equity homeownership program.
(e) Layering of Assistance.--Assistance from grant amounts under
this Act may be provided on behalf of a qualified homebuyer who is
receiving assistance from other sources, including other State,
Federal, local, private, public, and nonprofit sources, for acquisition
of an eligible home.
(f) State Administration.--
(1) In general.--The Secretary shall require that each
State receiving grant amounts under this Act administer the
program to provide assistance with such amounts through the
State housing finance agency for the State or such other
housing agency of the State as the Secretary finds appropriate,
except that any such agency may, at the option of the agency,
contract with a nonprofit entity, including a housing
counseling agency approved by the Secretary, to administer such
assistance.
(2) Affirmatively furthering fair housing.--For a State to
be eligible for a grant under this Act, the State shall be in
compliance with the Secretary's regulations implementing the
requirement under section 808(e)(5) of the Fair Housing Act (42
U.S.C. 3608(e)(5)) to affirmatively further fair housing.
(3) Prohibition of priority.--In selecting qualified
homebuyers for assistance with grant amounts under this Act, a
State or eligible entity may not provide any priority or
preference for homebuyers who are acquiring eligible homes with
a mortgage loan made, insured, guaranteed, or otherwise
assisted by the State housing finance agency for the State, any
other housing agency of the State, or an eligible entity when
applicable.
(g) Reallocation of State Amounts.--The Secretary shall reallocate
any grant funds under this Act allocated for a fiscal year that remain
unused at the end of such fiscal year among States and eligible
entities that demonstrate to the Secretary the capacity to expend such
amounts and that are satisfactorily meeting the goals of the program
under this Act, as determined by the Secretary.
(h) Uniformity and Program Standardization.--The Secretary shall
establish a uniform set of requirements to which each State and
eligible entity receiving grant amounts under this Act shall comply.
SEC. 3. QUALIFIED HOMEBUYERS.
(a) Requirements.--Assistance from grant amounts under this Act may
be provided only on behalf of a homebuyer who meets all of the
following requirements:
(1) Income.--The household of the homebuyer has an income
that does not exceed--
(A) 120 percent of median income for the area (as
determined by the Secretary) within which--
(i) the eligible home to be acquired using
such assistance is located; or
(ii) the place of residence of the
homebuyer is located; or
(B) in the case of a homebuyer acquiring an
eligible home that is located in a high-cost area. as
determined by the Secretary, 180 percent of the median
income for the area within which the eligible home to
be acquired using such assistance is located; and
(2) First-time homebuyer.--The homebuyer, as self-attested
by the homebuyer, is a first-time homebuyer, as such term is
defined in section 92.2 of the Secretary's regulations (24
C.F.R. 92.2), except that for purposes of this subsection the
reference in such section 92.2 to the American Dream
Downpayment Initiative shall be considered to refer to the
program under this Act.
(3) First-generation homebuyer.--The homebuyer is, as self-
attested by the homebuyer--
(A) an individual--
(i) whose parents or legal guardians do not
have any present residential ownership interest
in any State; and
(ii) whose spouse, or domestic partner, and
each member of whose household has not, during
the 3-year period ending upon acquisition of
the eligible home to be acquired using such
assistance, had any present ownership interest
in a principal residence in any State; or
(B) an individual who has at any time been placed
in foster care.
(b) Reliance on Borrower Attestations.--No creditor shall be
subject to liability, including monetary penalties or requirements to
indemnify a Federal agency or repurchase a loan that has been sold or
securitized, for the provision of downpayment assistance under this Act
to a borrower who does not meet the eligibility requirements if the
creditor does so in good faith reliance on borrower attestations of
eligibility required by this Act or regulation.
SEC. 4. ELIGIBLE HOMES.
(a) In General.--Assistance from grant amounts under this Act may
be provided only in connection with the acquisition by a qualified
homebuyer of a residential property that--
(1) consists of 1 to 4 dwelling units; and
(2) will be occupied by the qualified homebuyer, in
accordance with such assurances and commitments as the
Secretary shall require, as the primary residence of the
homebuyer, subject to section 3.
(b) Repayment of Assistance.--
(1) Requirement.--The Secretary shall require that, if a
homebuyer on behalf of whom assistance is provided from grant
amounts under this Act fails or ceases to occupy the property
acquired using such assistance as the primary residence of the
homebuyer, except in the case of assistance is provided in
connection with the purchase of a primary residence through a
shared equity homeownership program, the homebuyer shall repay
to the Secretary--
(A) 100 percent of the amount of such assistance,
if such failure to occupy commences before the
expiration of the 12-month period beginning on the date
of acquisition;
(B) 80 percent of the amount of such assistance, if
such failure to occupy commences after the expiration
of the 12-month period beginning on such date of
acquisition but before the expiration of the 24-month
period beginning on such date of acquisition;
(C) 60 percent of the amount of such assistance, if
such failure to occupy commences after the expiration
of the 24-month period beginning on such date of
acquisition but before the expiration of the 36-month
period beginning on such date of acquisition;
(D) 40 percent of the amount of such assistance, if
such failure to occupy commences after the expiration
of the 36-month period beginning on such date of
acquisition but before the expiration of the 48-month
period beginning on such date of acquisition; and
(E) 20 percent of the amount of such assistance, if
such failure to occupy commences after the expiration
of the 48-month period beginning on such date of
acquisition but before the expiration of the 60-month
period beginning on such date of acquisition.
(2) Limitation.--Notwithstanding paragraph (1), if a
homebuyer on behalf of whom assistance is provided from grant
amounts under this Act experiences an unforeseen hardship, such
as death or military deployment, or sells the property acquired
with such assistance before the expiration of the 60-month
period beginning on such date of acquisition and the capital
gains from such sale are less than the amount the homebuyer is
required to repay the Secretary under paragraph (1), the
homebuyer shall not be liable to the Secretary for repayment of
the amount of such shortage.
(c) Community Land Trusts and Shared Equity Homeownership
Programs.--If assistance from grant amounts under this Act are provided
in connection with an eligible home made available through a community
land trust or shared equity homeownership program, such assistance
shall remain in the community land trust or shared equity property upon
transfer of the property to keep the home affordable to the next
eligible community land trust or shared equity homebuyer.
SEC. 5. ELIGIBLE MORTGAGE LOANS.
Assistance from grant amounts under this Act may be provided only
in connection with the acquisition of an eligible home involving a
residential mortgage loan that--
(1) meets the underwriting requirements and dollar amount
limitations for acquisition by the Federal National Mortgage
Association or the Federal Home Loan Mortgage Corporation;
(2) is made, insured, or guaranteed under title II of the
National Housing Act (12 U.S.C. 1707 et seq.) or title V of the
Housing Act of 1949 (42 U.S.C. 1471 et seq.);
(3) is a qualified mortgage, as such term is defined in
section 129C(b)(2) of the Truth in Lending Act (15 U.S.C.
1639c(b)(2));
(4) is made, insured, or guaranteed under chapter 37 of
title 38, United States Code; or
(5) is guaranteed under section 184 of the Housing and
Community Development Act of 1992 (12 U.S.C. 1715z-13a).
SEC. 6. HOUSING COUNSELING REQUIREMENT.
(a) In General.--Except as provided pursuant to section 3,
assistance with grant amounts under this Act may not be provided on
behalf of qualified homebuyer unless such homebuyer has completed a
program of counseling with respect to the responsibilities and
financial management involved in homeownership before entering into a
sales purchase agreement or loan application, except as provided under
subsection (c), as the Secretary shall require, provided through a
counseling agency approved by the Secretary. Such program may be
delivered virtually, by telephone, or any other method the Secretary
determines acceptable and shall include providing information on fair
housing rights and on the availability of post-purchase housing
counseling opportunities and instruction on how to file a fair housing
complaint.
(b) Alternative Requirement.--The Secretary shall provide that if a
qualified homebuyer is unable to complete the requirement under
subsection (a) within 30 days due to housing counseling agency capacity
issues, a State or eligible entity may allow such qualified homebuyer
to complete alternative homebuyer education to fulfill the requirement
under subsection (a), including homebuyer education that is provided
through an online platform, and such qualified homebuyer shall be made
aware of the availability of post-purchase housing counseling
opportunities.
(c) Referral Upon Mortgage Denial.--The Secretary shall require
that any qualified homebuyer who has completed a counseling program
referred to in subsection (a) or alternative requirement pursuant to
subsection (b), who receives a commitment for assistance with grant
amounts under this Act and who applies for an eligible mortgage loan
for acquisition of an eligible home and is denied such mortgage loan,
shall be referred to a counseling agency described in subsection (a)
for counseling relating to such denial and for re-qualification. An
eligible homebuyer may be re-qualified at least one additional time in
a calendar year, or more as determined by the Secretary.
(d) Funding.--Of any amounts appropriated to carry out this Act,
the Secretary shall use not less than 5 percent for costs of providing
counseling referred to in subsection (a).
SEC. 7. ADMINISTRATIVE COSTS.
Of any grant amounts under this Act received by a State or
eligible entity, the State or eligible entity may use not more than 5
percent for administrative costs of and training for carrying out the
program of the State or eligible entity to provide assistance with such
grant amounts.
SEC. 8. REPORTS.
(a) In General.--For each fiscal year during which the Secretary
makes grants under this Act, the Secretary shall submit to the
Congress, and make publicly available online in an easily accessible
location on the website of the Department, a report that shall
include--
(1) demographic information regarding applicants for and
recipients of assistance provided pursuant to this Act,
including race, ethnicity, and gender;
(2) information regarding the types and amount of
assistance provided, including downpayment assistance,
assistance with closing costs, and assistance to reduce
mortgage loan interest rates;
(3) information regarding properties acquired using such
assistance, including location, property value, property type,
and first mortgage type and investor.
All data shall be disaggregated by zip code or census tract level,
whichever is most feasible, and demographic information, including
race, ethnicity, and gender, and any other data points the Secretary
deems appropriate especially to observe equitable outcomes to ensure
the program is affirmatively furthering fair housing.
(b) Capacity Building.--Of any amounts appropriated to carry out
this Act, the Secretary shall use not more than 1 percent to assist
States and eligible entities to develop capacity to meet the reporting
requirements under subsection (a). The Secretary shall encourage States
and eligible entities to consult with community-based and nonprofit
organizations that have as their mission to advance fair housing and
fair lending.
(c) Privacy Requirements.--
(1) In general.--Each State and eligible entity that
receives a grant under this Act shall establish data privacy
and security requirements for the information described in
subsection (a) that--
(A) include appropriate measures to ensure that the
privacy of the individuals and households is protected;
(B) provide that the information, including any
personally identifiable information, is collected and
used only for the purpose of submitting reports under
subsection (a); and
(C) provide confidentiality protections for data
collected about any individuals who are survivors of
intimate partner violence, sexual assault, or stalking.
(2) Statistical research.--
(A) In general.--The Secretary--
(i) may provide full and unredacted
information provided under subsection (a),
including personally identifiable information,
for statistical research purposes in accordance
with existing law; and
(ii) may collect and make available for
statistical research, at the census tract
level, information collected under paragraph
(1).
(B) Application of privacy requirements.--A
recipient of information under subparagraph (A) shall
establish for such information the data privacy and
security requirements described in paragraph (1).
SEC. 9. COMPELLING INTEREST STUDY.
The Secretary and the Attorney General shall survey and compile
evidence to determine whether or not there is a sufficient history of
discrimination in housing and the appropriate remedy to redress such
historic discrimination. The Secretary shall make conclusions and
recommendations based on the evidence and provide States and eligible
entities granted awards under this Act an opportunity to modify their
programs for assistance under this Act according to such
recommendations.
SEC. 10. DEFINITIONS.
For purposes of this Act, the following definitions shall apply:
(1) Affirmatively further fair housing.--The term
``affirmatively further fair housing'' has the same meaning as
defined by the Secretary to implement section 808(e)(5) of the
Fair Housing Act (42 U.S.C. 3608(e)(5)).
(2) Community land trust.--The term ``community land
trust''' means a nonprofit organization or State or local
governments or instrumentalities that--
(A) use a ground lease or deed covenant with an
affordability period of at least 30 years or more to--
(i) make homeownership units affordable to
households; and
(ii) stipulate a preemptive option to
purchase the affordable homeownership units so
that the affordability of the units is
preserved for successive income-eligible
households; and
(B) monitor properties to ensure affordability is
preserved.
(3) Eligible entity.--The term ``eligible entity'' means--
(A) a minority depository institution, as such term
is defined in section 308 of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 1463 note);
(B) a community development financial institution,
as such term is defined in section 103 of the Riegle
Community Development and Regulatory Improvement Act of
1994 (12 U.S.C. 4702), that is certified by the
Secretary of the Treasury and targets services to
minority and low-income populations and provides
services in neighborhoods having high concentrations of
minority and low-income populations; and
(C) any other nonprofit, mission-driven entity that
the Secretary finds targets services to minority and
low-income populations and provides services in
neighborhoods having high concentrations of minority
and low-income populations.
(4) Eligible home.--The term ``eligible home'' means a
residential dwelling, including a unit in a condominium or
cooperative project or a manufactured housing unit, that meets
the requirements of section 4.
(5) Eligible mortgage loan.--The term ``eligible mortgage
loan'' means a residential mortgage loan that meets the
requirements of section 5.
(6) Qualified homebuyer.--The term ``qualified homebuyer''
means a homebuyer who meets the requirements of section 3, and
includes homebuyers consisting of multiple individuals, co-
purchasers, and multi-member households.
(7) Secretary.--The term ``Secretary'' means the Secretary
of Housing and Urban Development.
(8) Shared equity homeownership program.--
(A) In general.--The term ``shared equity
homeownership program'' means affordable homeownership
preservation through a resale restriction program
administered by a community land trust, other nonprofit
organization, or State or local government or
instrumentalities.
(B) Affordability requirements.--Any such program
under subparagraph (A) shall--
(i) provide affordable homeownership
opportunities to households; and
(ii) utilize a ground lease, deed
restriction, subordinate loan, or similar legal
mechanism that includes provisions ensuring
that the program shall--
(I) maintain the homeownership unit
as affordable for subsequent very low-,
low-, or moderate-income families for
an affordability term of at least 30
years after recordation;
(II) apply a resale formula that
limits the homeowner's proceeds upon
resale; and
(III) provide the program
administrator or such administrator's
assignee a preemptive option to
purchase the homeownership unit from
the homeowner at resale.
(9) Socially and economically disadvantaged individual.--
The term ``socially and economically disadvantaged individual''
means an individual who meets the following requirements:
(A) Social disadvantage.--
(i) In general.--The individual is a member
of a socially disadvantaged group, whose
members have historically been subjected to
racial or ethnic discrimination within the
United States because of their identity as
members of such group without regard to their
individual qualities.
(ii) Presumption; rebuttal.--An individual
identifying as Black, Hispanic, Native
American, or Asian American, or any combination
thereof, shall be presumed to be socially
disadvantaged for purposes of clause (i). Such
presumption may be rebutted by such individual
with credible evidence to the contrary.
(iii) Burden of proof.--An individual who
does not identify as described in clause (ii)
shall be required to establish individual
social disadvantage for purposes of clause (i)
by a preponderance of the evidence.
(iv) Rules.--The Secretary may issue
regulations as necessary to establish
procedures for complying with this
subparagraph.
(B) Economic disadvantage.--The individual has an
income that meets the requirements under section 3(a).
(10) State.--The term ``State'' means any State of the
United States, the District of Columbia, the Commonwealth of
Puerto Rico, the United States Virgin Islands, Guam, the
Commonwealth of the Northern Mariana Islands, American Samoa,
and the tribal government of any Indian tribe, as such term is
defined in section 4 of the Native American Housing Assistance
and Self-Determination Act of 1996 (25 U.S.C. 4103).
SEC. 11. REGULATIONS.
The Secretary shall issue any regulations necessary to implement
this Act.
SEC. 12. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated for grants under this Act
$100,000,000,000, and any amounts appropriated pursuant to this section
shall remain available until expended.
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