Four Democratic members of Congress, including Reps. Maxine Waters, Al Green, Ayanna Pressley, and Sylvia Garcia, have announced reintroduction of the Downpayment Toward Equity Act—legislation that would help close the U.S. wealth and homeownership gaps by providing $100 billion in direct assistance to help first-time, first-generation homebuyers purchase their first home.
For decades, homeownership has served as a driver of household wealth in the U.S., as a 2024 Aspen Institute report found that homeowners are nearly 40 times wealthier than renters. Homeownership also consistently outperforms stocks and bonds as an investment vehicle, while offering the essential utility of housing families. Its returns make it more beneficial than renting for most. In addition, home equity provides economic security, serving as a cushion in times of crisis, like during a pandemic or a recession.
“Homeownership is a cornerstone of the American Dream and the most powerful tool for building generational wealth. For too long, families of color and first-generation buyers have faced insurmountable barriers to owning a home due to predatory lending, high downpayment requirements, and increasing home prices,” said Rep. Waters. “The Downpayment Toward Equity Act will provide targeted, direct assistance to help millions of hardworking Americans finally achieve homeownership and begin to build wealth for themselves and their families. This type of assistance is needed now more than ever as the Trump Administration’s reckless economic policies continue to drive up the cost of living and rip the dream of homeownership away from hard-working families.”
Keys to the Downpayment Toward Equity Act
Major highlights of the Downpayment Toward Equity Act include:
- Up to $20,000 for first-generation homebuyers, and up to $25,000 for socially and economically disadvantaged homebuyers, to cover downpayments, closing costs, and mortgage interest rate buydowns.
- Assistance to those most in need, including Black, Latino, and other historically marginalized communities, to help close the racial wealth and homeownership gaps.
- Makes eligible those with incomes up to 120% of area median income (or 180% in high-cost areas), including individuals whose parents or guardians have not owned a home in the past three years and individuals who have been in foster care.
- Homebuyer education and counseling required to ensure sustainable homeownership and reduce the risk of foreclosure.
- Allows funds to be used with FHA, VA, USDA, Fannie Mae, Freddie Mac, and other qualified mortgages.
- Administers funds through the U.S. Department of Housing & Urban Development (HUD) and state agencies, with 75% of funds distributed by population, home prices, and racial disparities. The remaining 25% will be competitively awarded to community-based organizations.
- Mandates annual reports to Congress on program performance and outcomes, allowing up to 5% of funds for administrative costs.
Far Reaching Legislation
According to the Urban Institute, targeting downpayment assistance to first-generation homebuyers, as defined in the bill, could reach five million eligible homebuyers.
“I am proud to once again co-lead the Downpayment Toward Equity Act with Ranking Member Waters,” said Rep. Green of HR 4231, originally introduced in June 2023. “This legislation would help address the racial wealth and homeownership gaps in this country at a time when President Trump is doing his best to exacerbate these gaps. As this administration commits itself to enriching the elite at the expense of ordinary Americans, is imperative that Congress affirm its commitment to removing barriers to housing.”
And despite the many benefits highlighted by the measure, homeownership continues to slip further out of reach for working families, with the share of first-time homebuyers hitting an all-time low of 24% between 2023 and 2024. Today, the 30-year fixed-rate mortgage stands just under 7%, reflecting a significant increase over the past four years, while home prices have increased by over 57% since 2019.
“Housing is a fundamental human right, but families in Massachusetts and across the country are living in a housing crisis we can’t ignore,” said Rep. Ayanna Pressley. “This National Homeownership Month, I’m proud to join Ranking Member Waters and my colleagues in reintroducing the Downpayment Toward Equity Act, which will help close the racial wealth gap and affirm economic justice. With Black and brown families historically denied the opportunity to own homes and build wealth, our bill will empower first-generation homebuyers to access robust homeowner assistance and build wealth. As Trump and Republicans drive up costs, propose drastic budget cuts to rental aid, and exacerbate our housing crisis, this is exactly the type of policy this moment demands–and Congress must pass it without delay.”
Rallying Industry Support
A number of industry stakeholders, including the National Fair Housing Alliance, National Council of State Housing Agencies (NCSHA), National Association of Realtors (NAR), and Americans for Financial Reform, have come out in support of the Downpayment Toward Equity Act.
“The National Fair Housing Alliance: The National Fair Housing Alliance commends HFSC Ranking Member Maxine Waters for reintroducing the Downpayment Toward Equity (DTE) Act, which is based on a policy proposal developed by the National Fair Housing Alliance and the Center for Responsible Lending,” said Nikitra Bailey, EVP of the National Fair Housing Alliance. “Pervasive discrimination in housing and lending, including redlining, continues and stifles equal opportunities while undermining the health of the economy. The DTE Act is a fair and innovative approach to overcoming the most common barrier-a lack of a down payment- for people seeking the American dream of safe, stable homeownership. The DTE Act has the potential to create five million new homeowners among people who would be the first in their family to buy a home in urban, rural, and suburban communities in all 50 states, Washington DC, and Puerto Rico. Passing the DTE Act would be a significant step toward addressing longstanding racial wealth and homeownership gaps while serving as a boost to the fragile housing market. And it would enable teachers, first responders, police officers, nurses, and others a chance to secure stable monthly housing payments during the nation’s fair and affordable housing crisis. The National Fair Housing Alliance strongly supports passing the DTE Act.”
Shannon McGahn, EVP and Chief Advocacy Officer for NAR, added: “We applaud Ranking Member Waters’ reintroduction of the Downpayment Toward Equity Act. This bill has the potential to be a meaningful step toward addressing long-standing disparities in wealth and homeownership, while expanding access for first-generation buyers. By directing assistance to those who need it most, the bill acknowledges that the greatest barrier to homeownership today isn’t credit—it’s cash. REALTORS see firsthand how a lack of upfront funds keeps creditworthy Americans out of the market. We commend the leadership behind this legislation and look forward to supporting it as it moves through Congress.”
“The National Council of State Housing Agencies thanks Ranking Member Waters for reintroducing the Downpayment Toward Equity Act,” said Stockton Williams, Executive Director of NCSHA. “This legislation would enable HFAs to provide down payment assistance to more working families and allow HUD to ensure their reasonable administrative expenses for running the program are met. Increasing access to down payment assistance is a key step Congress can take to help build a healthy home purchase market and expand homeownership opportunities for working families. HFAs are the ideal choice to administer such a program, as they have decades of experience responsibly lending to low- and moderate-income home buyers and are the largest source of down payment assistance in the market today. NCSHA suggests that Congress advance this legislation and take action to address the crucial shortage of affordable for-ownership homes that is pricing many working families out of the market.”
Caroline Nagy, Associate Director of Housing at Americans for Financial Reform, added her support for the measure as well: “Today, less than one-fourth of home sales go to first time homebuyers, in no small part because private equity firms are gobbling up houses for rental properties, worsening the racial homeownership and wealth gaps. It’s time for Congress to take action. The Downpayment Toward Equity Act would provide a desperately-needed hand up to first-generation homebuyers, including downpayment assistance and housing counseling. We urge Congress to pass it today.”
