The White House announces new measures on home ownership
For millions of Americans, home ownership underpins many aspects of their lives, and for many it is also their primary source of wealth. The Biden-Harris Administration is committed to expanding access to homeownership, ensuring that homeowners can afford to stay in their homes and make the repairs they need, and that the potential to build wealth from homeownership works equally for everyone.
today, The Biden-Harris administration releases new data showing significant federal investment in homeownership, and announces key new actions to accelerate progress. These actions make important strides, but given the shortage of homes on the market and current interest rates, to ensure homeownership is affordable for all families, we need Congress to act. That’s why President Biden has proposed a $16 billion Home Neighborhood Tax Credit, which would result in more than 400,000 homes being built or rehabilitated, creating a path for more families to buy a home and start building wealth. The president also proposed a $10 billion down payment assistance program that would ensure first-time homebuyers whose parents don’t own a home can access home ownership along with a $100 million down payment assistance pilot program to expand homeownership opportunities for next generation. The first and/or those with low wealth. First time home buyers.
New data shows strong investment in home ownership
The Treasury Department released data showing how President Biden’s Investing in America agenda supports existing homeowners and helps more Americans access affordable homeownership through more than $12 billion in support. The American Rescue Plan’s Homeowner Assistance Fund (HAF) has helped nearly 400,000 homeowners at risk of foreclosure. During the second quarter of 2023, states, territories, and tribes benefiting from HAF spent more than $5.5 billion to assist homeowners, a 32% increase from the first quarter of 2023. Additionally, through the State and Local Financial Recovery Funds Program Regional and international tribal governments are also supporting homeownership, in part by allocating more than $6.6 billion to support more than 17,000 units of affordable housing, through June 30, 2023.
Federal agencies also release data showing record support for low- and moderate-income homebuyers and first-time homebuyers:
- The U.S. Department of Housing and Urban Development (HUD) announces that the Federal Housing Administration (FHA) first-time homebuyer rate under the Biden-Harris administration is the highest since at least 2000. Since the beginning of the administration, the FHA has supported approximately 1.8 million homeowners with purchase mortgages, 83.6 percent, or 1.5 million of whom are first-time homebuyers.
- The U.S. Department of Agriculture (USDA) announced that last fiscal year it made more than 7,100 direct housing loans, subsidizing loan rates down to 1 percent for some borrowers. This is the largest number of loans since 2010, serving homebuyers with an average income of $42,918. Nearly 55 percent of these borrowers were female-headed households, and 22 percent identified as African American or Black.
- The Department of Veterans Affairs (VA) announces that in 2023 it helped 145,480 veterans maintain homeownership and/or avoid foreclosure.
New measures to support home ownership
We know that despite these milestones and actions, homeownership remains out of reach for many, which is why the administration is committed to aggressively increasing homeownership opportunities, which include:
- Allowing homebuyers to benefit from income from accessory dwelling units: Today, HUD, through the FHA, published a new policy that allows prospective borrowers to use a portion of the actual or potential rental income from an accessory dwelling unit (ADU) to add to the borrower’s actual income for purposes of qualifying for an FHA-insured mortgage. . The new FHA policies will increase the ability of homebuyers across the country to obtain affordable mortgage credit when seeking to purchase properties with ADUs, add ADUs to existing structures, or build new homes with ADUs. The flexibilities will help more first-time homebuyers, seniors, and multi-generational families take advantage of social housing units to build generational wealth through homeownership while creating new affordable housing in their communities.
- Increasing mortgage opportunities for tribes: USDA is awarding $9 million in loans to nine Native American community development organizations as part of its efforts to increase access to homeownership for Native Americans on tribal lands through a re-lending demonstration program. The program provides capital to community development financial institutions (NCDFIs) so they can forgive low- and very low-income people who live on tribal lands and need affordable single-family homes.
- Ensuring the success of innovative home ownership models: Before the end of the year, USDA will launch a pilot program to test alternative eligibility criteria related to community representation for community land credit organizations through the Section 502 Direct Home Loan Program. Through this pilot program, USDA will evaluate whether expanding eligibility criteria in this way increases access to affordable homeownership opportunities.
- Facilitating financing for home repairs: HUD, through the FHA, continues its work to modernize the 203(k) Rehabilitation Mortgage Insurance Program to help homebuyers and homeowners finance the purchase or refinance of homes in need of improvement. The FHA is considering potential policy changes that could increase the funds available to borrowers for renovations and repairs. Other policies under review would allow more time to complete these improvements. These and other changes to the program will increase the use of FHA-insured mortgages to finance renovations that will improve existing homes and return them to good use, increasing the supply of housing in communities across the country.
- Helping homeowners know their rights and stay in their homes: The Consumer Financial Protection Bureau, an independent agency, is working on reforms to current rules to help homeowners when they have trouble making their mortgage payments. The reforms build on observations made during the Covid-19 pandemic about where the rules could be streamlined and simplified. The reforms will ensure that homeowners get the help they need without unnecessary delays or hurdles, and that they are better able to not fall into foreclosure.
- Helping homeowners who default on their mortgages: In fiscal year 2024, VA will deploy a new home retention option that provides a long-term solution to address the most impacted veteran borrowers. The VA Service Purchase Program (VASP) will help older borrowers who are behind on their mortgage loan and who do not qualify for traditional home retention options.
This announcement builds on previous work across the administration, including a policy announced earlier this year that lowered mortgage insurance fees for borrowers receiving FHA loans, saving them an average of $800 annually from Housing costs. HUD has also made it easier for first-time homebuyers to qualify for FHA-insured mortgage financing by allowing lenders to use positive rental history as a factor in evaluating an applicant’s creditworthiness and by providing more access to FHA-insured mortgage financing. Single-family affordable housing for creditworthy individuals with student loan debt. Ginnie Mae is enhancing its security disclosures so that investors can, for the first time, measure their social impact in driving first-time homeownership. This policy can expand access to capital for first-time homebuyers. This work builds on the efforts of the Department’s Interagency Task Force on Property Appraisal and Equity (PAVE), which is making critical progress toward ensuring fairness in the home appraisal process. The Department is committed to positively promoting fair housing in its work, because every individual should have fair housing choice and access to housing opportunities. However, the White House is calling on Congress to approve the President’s proposals so we can ensure that homeownership is a possibility for all Americans.