In a concerted effort to bolster homeownership for millions of Americans, the Biden-Harris Administration has unveiled a multi-pronged strategy to increase accessibility, affordability, and support for existing and aspiring homeowners.
For many Americans, owning a home is a cornerstone of their lives and a primary source of wealth. In a news release, the administration said it is determined to break down barriers and ensure the wealth-building potential of homeownership is accessible to all.
The Treasury Department released data showcasing the “significant federal investment” in homeownership under President Biden’s “Investing in America” agenda, providing over $12 billion in support. Notably, the White House said the American Rescue Plan’s Homeowner Assistance Fund has aided nearly 400,000 homeowners at risk of foreclosure.
The Department of Housing and Urban Development (HUD) reported that the Federal Housing Administration’s first-time homebuyer rate is at its highest since 2000, with 1.8 million homeowners benefiting from FHA-backed mortgages, 83.6 percent of whom are first-time buyers.
Additionally, the Department of Agriculture announced that it has made strides, offering over 7,100 direct housing loans in the past fiscal year, benefiting borrowers with an average income of $42,918. The White House said 55 percent of those borrowers were from female-headed households, and 22 percent identified as Black or African American.
Meanwhile, the Department of Veterans Affairs said it has assisted 145,480 Veterans in retaining homeownership and avoiding foreclosure in 2023.
Biden has proposed a substantial $16 billion for the Neighborhood Homes Tax Credit, which could lead to the construction or rehabilitation of over 400,000 homes, paving the way for more families to enter the housing market and begin building their wealth. A $10 billion down payment assistance program is on the table, specifically tailored to help first-time homebuyers whose parents do not own a home.
The administration urged Congress to address the current housing market constraints swiftly.
The Biden-Harris Administration announced the following new measures:
- Leveraging Accessory Dwelling Units: HUD, through FHA, has implemented a policy allowing prospective borrowers to include rental income from Accessory Dwelling Units (ADUs) in their qualification for FHA-insured mortgages. This move aims to expand access to affordable mortgage credit for a broader range of homebuyers.
- Empowering Native American Communities: The USDA is allocating $9 million in loans to nine Native American Community Development Institutions, part of an initiative to improve access to homeownership on Tribal Lands.
- Pilot Program for Community Land Trust Organizations: The USDA will launch a pilot program to assess alternative eligibility criteria for Community Land Trust Organizations under its Section 502 Direct Home Loan Program, potentially increasing access to affordable homeownership opportunities.
- Streamlining Home Repairs Financing: HUD is actively working on updating the 203(k) Rehabilitation Mortgage Insurance Program to facilitate the financing of home improvements, allowing homeowners to restore properties to viable use.
- Strengthening Consumer Protections: The Consumer Financial Protection Bureau is working on reforms to streamline rules for homeowners facing difficulties in mortgage payments, ensuring timely and effective assistance.
- Support for Severely Impacted Veterans: In fiscal year 2024, the VA will introduce the VA Servicing Purchase program, offering a long-term solution for Veterans struggling with mortgage payments.
