[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 3930 Introduced in Senate (IS)]
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118th CONGRESS
2d Session
S. 3930
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 SENATE OF THE UNITED STATES
March 12, 2024
Mr. Warnock (for himself, Ms. Butler, Mr. Brown, and Mr. Van Hollen)
introduced the following bill; which was read twice and referred to the
Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
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
2024''.
SEC. 2. DEFINITIONS.
In this section:
(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) Eligible entity.--The term ``eligible entity'' means--
(A) a minority depository institution, as 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 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 or provides services in
neighborhoods having high concentrations of minority
and low-income populations;
(C) any other nonprofit, mission-driven entity that
the Secretary finds has a track record of providing
assistance to homeowners, targets services to minority
and low-income populations, or provides services in
neighborhoods having high concentrations of minority
and low-income populations; and
(D) a unit of general local government, as defined
in section 102 of the Housing and Community Development
Act of 1974 (42 U.S.C. 5302).
(3) 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 5.
(4) Eligible mortgage loan.--The term ``eligible mortgage
loan'' means a residential mortgage loan that meets the
requirements of section 6.
(5) First-generation homebuyer.--The term ``first-
generation homebuyer'' means a homebuyer that is--
(A) an individual--
(i) whose parents or legal guardians do
not, or did not at the time of their death, to
the best of the individual's knowledge, have
any present ownership interest in a residence
in any State, excluding ownership of heir
property or ownership of chattel; and
(ii) whose spouse or domestic partner 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 residence in any State,
excluding ownership of heir property or
ownership of chattel, whether the individual is
a co-borrower on the loan or not; or
(B) an individual who has at any time been placed
in foster care or institutional care whose spouse or
domestic partner has not, during the 3-year period
ending upon acquisition of the eligible home to be
acquired using such assistance, had any ownership
interest in a residence in any State, excluding
ownership of heir property or ownership of chattel,
whether such individuals are co-borrowers on the loan
or not.
(6) Heir property.--The term ``heir property'' means
residential property for which title passed by operation of law
through intestacy and is held by 2 or more heirs as tenants in
common.
(7) Ownership interest.--The term ``ownership interest''
means any ownership, excluding any interest in heir property,
in--
(A) real estate in fee simple;
(B) a leasehold on real estate under a lease for
not less than 99 years which is renewable; or
(C) a fee interest in, or long-term leasehold
interest in, real estate consisting of a 1-family unit
in a multifamily project, including a project in which
the dwelling units are attached, or are manufactured
housing units, semi-detached, or detached, and an
undivided interest in the common areas and facilities
which serve the project.
(8) Qualified homebuyer.--The term ``qualified
homebuyer''--
(A) means a homebuyer who meets the requirements of
section 4; and
(B) includes homebuyers consisting of multiple
individuals, co-purchasers, and multi-member
households.
(9) Secretary.--The term ``Secretary'' means the Secretary
of Housing and Urban Development.
(10) Shared equity homeownership program.--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.
(11) 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 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 4(a).
(12) 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 defined in
section 4 of the Native American Housing Assistance and Self-
Determination Act of 1996 (25 U.S.C. 4103).
SEC. 3. FIRST-GENERATION DOWNPAYMENT ASSISTANCE PROGRAM.
(a) Establishment.--The Secretary shall carry out a program under
this Act to provide grants to States and eligible entities to provide
financial assistance under this section to first-generation homebuyers
to assist them with acquiring owner-occupied primary residences.
(b) Allocation.--After reserving amounts as required under sections
7(d) and 9(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--
(A) take into consideration the best available data
to provide more funding to States with a higher
approximate number of potential qualified homebuyers;
and
(B) be adjusted to reflect median area home prices.
(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) subsidies to make shared equity homes
affordable to homebuyers by discounting the price for
which the home will be sold and to preserve the
affordability of the home for subsequent homebuyers;
and
(C) 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 the greater of $20,000 or 10 percent of
the purchase price in the case of a qualified homebuyer, not to
include assistance received under subsection (c)(2)(C) for
disability related home modifications, except that the
Secretary may increase such maximum limitation amounts--
(A) for qualified homebuyers who are socially and
economically disadvantaged; or
(B) 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 to affirmatively further fair housing.
(3) Prohibition of priority or recoupment of funds.--In
selecting qualified homebuyers for assistance with grant
amounts under this Act, a State or eligible entity may not--
(A) 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; or
(B) seek to recoup any funds associated with the
provision of downpayment assistance to the qualified
homebuyer, whether through premium pricing or
otherwise, except as provided in subsection (g) or
otherwise authorized by the Secretary.
(g) Recapture and Reallocation.--The Secretary shall require
changes in a grantee's policy or distribution of funds or recapture any
amounts remaining available to a grantee, and reallocate such funds
among other States and eligible entities, if the Secretary determines
in his or her sole discretion that--
(1) a State or eligible entity--
(A) has not demonstrated the capacity to expend
grant funds in a timely manner that furthers the
purposes under this Act; or
(B) is distributing or plans to distribute grant
funds in a manner that results or will predictably
result in qualified homebuyers from racial or ethnic
groups that have faced historic obstacles to
homeownership failing to receive the benefits of such
funds in proportion to their population among qualified
homebuyers in the relevant area; or
(2) there is insufficient demand among qualified eligible
entities to distribute funds.
(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. 4. 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, 140 percent of the median
income for the area within which the eligible home to
be acquired using such assistance is located.
(2) First-time homebuyer.--The homebuyer, as self-attested
by the homebuyer, is a first-time homebuyer, as defined in
section 104 of the Cranston Gonzalez National Affordable
Housing Act (42 U.S.C. 12704), except that--
(A) for the purposes of this Act the reference in
such section 104 to title II shall be considered to
refer to this Act; and
(B) ownership of heir property shall not be treated
as owning a home for purposes of determining whether a
borrower qualifies as a first-time homebuyer.
(3) First-generation homebuyer.--The homebuyer, as self-
attested by the homebuyer, is a first-generation homebuyer.
(b) Reliance on Borrower Attestations.--No additional documentation
beyond the borrower's attestation shall be required to demonstrate
eligibility under paragraphs (2) and (3) of subsection (a), and 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. 5. 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 4.
(b) Repayment of Assistance.--
(1) Requirement.--The Secretary shall require that, if a
homebuyer to or 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
provided in connection with the purchase of a principal
residence through a shared equity homeownership program, the
homebuyer shall repay to the State or eligible entity, as
applicable, in a proportional amount of the assistance the
homebuyer receives based on the number of years they have
occupied the eligible home up to 5 years, except that no
assistance shall be repaid if the qualified homebuyer occupies
the eligible home as a primary residence for 5 years or more.
(2) Limitation.--Notwithstanding subparagraph (A), a
homebuyer to or on behalf of whom assistance is provided from
grant amounts under this Act shall not be liable to the State
or eligible entity for the repayment of the amount of such
shortage if the homebuyer fails or ceases to occupy the
property acquired using such assistance as the principal
residence of the homebuyer at least in part because of a
hardship, 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 to a
bona fide purchaser in an arm's length transaction are less
than the amount the homebuyer is required to repay the State or
eligible entity under subparagraph (A).
SEC. 6. 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 any program
administered by the Secretary;
(3) is made, insured, or guaranteed by the Department of
Agriculture;
(4) is a qualified mortgage, as defined in section
129C(b)(2) of the Truth in Lending Act (15 U.S.C. 1639c(b)(2));
or
(5) is guaranteed for the benefit of a veteran.
SEC. 7. HOUSING COUNSELING REQUIREMENT.
(a) In General.--Except as provided pursuant to section 4,
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 in-person, 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 1 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. 8. ADMINISTRATIVE COSTS.
States and eligible entities receiving grant amounts under this
Act may use a portion of such amounts for administrative costs up to
the limit specified by the Secretary.
SEC. 9. REPORTS.
(a) Annual Report.--
(1) In general.--For each fiscal year during which the
Secretary makes grants under this Act, the Secretary shall
submit to Congress, and make publicly available online in an
easily accessible location on the website of the Department of
Housing and Urban Development, a report that shall include--
(A) demographic information regarding applicants
for and recipients of assistance provided pursuant to
this Act, including race, ethnicity, and gender;
(B) information regarding the types and amount of
assistance provided, including downpayment assistance,
assistance with closing costs, and assistance to reduce
mortgage loan interest rates; and
(C) information regarding properties acquired using
such assistance, including location, property value,
property type, and first mortgage type and investor.
(2) Disaggregation.--All data included in an report
required under paragraph (1) 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 grant
program is affirmatively furthering fair housing.
(b) Capacity Building.--
(1) In general.--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).
(2) Consultation.--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. 10. COMPELLING INTEREST STUDY.
(a) In General.--The Secretary, in consultation with the Attorney
General, shall survey and compile evidence to determine whether or not
there is a sufficient history of discrimination in housing and, if so,
the appropriate remedy to redress such historic discrimination.
(b) Recommendations.--The Secretary shall make conclusions and
recommendations based on the evidence compiled under subsection (a) 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. 11. IMPLEMENTATION.
The Secretary shall have the authority to establish by notice or
mortgagee letter any requirements that the Secretary determines are
necessary for timely and effective implementation of the grant program
under this Act and the expenditure of funds appropriated, which
requirements shall take effect upon issuance.
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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