Downpayment Toward Equity Act of 2025

This bill would help first-generation, first-time homebuyers with money for a down payment and related costs. States and certain local or nonprofit groups would get federal grants to give this help to eligible buyers. The money could cover down payments, closing costs, interest rate reductions, accessibility upgrades before move‑in, and discounts that keep certain homes affordable for the next buyer as well. Seventy‑five percent of funds would flow to states by formula, and 25 percent to eligible entities by competition . Grants are generally capped at the greater of $20,000 or 10% of the home price, with higher limits allowed for socially and economically disadvantaged buyers or in high‑cost areas . The bill authorizes $100 billion, available until used .

To qualify, a buyer must be a first‑time and first‑generation homebuyer and have household income at or below 120% of the area median income (up to 140% in high‑cost areas). Self‑attestation is allowed for first‑time and first‑generation status, and lenders acting in good faith on those attestations aren’t penalized if a mistake is later found . The home must be 1–4 units and become the buyer’s primary residence; if the buyer moves out within five years, they generally repay a portion, with exceptions for shared‑equity purchases and hardships . Buyers must complete housing counseling before signing a purchase agreement or applying for a loan, with backup options if counseling slots aren’t available; if a loan is denied, the buyer gets referred for more counseling and can try again . HUD will set uniform rules, ensure states further fair housing, and can shift funds away from places that are slow to use them or that distribute them in ways that leave out racial or ethnic groups who have faced historic obstacles to homeownership. States can’t give preference to their own mortgage products or claw back assistance through pricing tricks . Public reporting and strong privacy protections are required .

Key points

• Who is helped: First‑generation, first‑time homebuyers under local income limits; higher limits in high‑cost areas .
• What you can get: Up to the greater of $20,000 or 10% of the price for down payment, closing costs, rate buydowns, accessibility upgrades, or shared‑equity discounts; possibly more for disadvantaged buyers or high‑cost areas .
• What you must do: Live in the home as your primary residence; complete housing counseling; use an eligible mortgage; repay some help if you move out within five years unless you qualify for an exception .
• How funds flow: 75% to states by formula, 25% to eligible entities competitively; HUD can reallocate to ensure timely, fair use .
• Transparency and privacy: Annual public reports with neighborhood‑level data, plus protections for personal information .