BAM Key Details:

  • President Biden announced new housing initiatives during Thursday’s State of the Union Address. 
  • The plan aims to make housing more affordable for working families and includes initiatives to lower the cost of homeownership, building and preserving homes, and lowering costs for renters. 

On Thursday night’s State of the Union Address, President Biden announced a set of new housing initiatives to make housing more accessible and affordable. 

During the address, Biden spoke on numerous topics, including the economy, health care and education. When it came to housing, he shared the Biden administration’s plan to lower housing costs for working families.

Watch what Biden has to say about housing starting here, or read the transcript below:

“I know the cost of housing is so important to you. Inflation keeps coming down, mortgage rates will come down as well, and the Fed acknowledges that. But I’m not waiting. 

“I want to provide an annual tax credit that will give Americans $400 a month for the next two years as mortgage rates come down to put towards their mortgages when they buy their first home or trade up for a little more space. 

“And my administration is also eliminating title insurance on federally-backed mortgages. When you refinance your home, you can save $1,000 or more as a consequence. 

“For millions of renters, we’re cracking down on big landlords who break antitrust laws by price fixing and driving up rents. We’ve cut red tape so builders can get federal financing, which is already helping build a record 1.7 million new housing units nationwide. Now pass and build and renovate two million affordable homes, and bring those rents down.”

Key Highlights of Biden’s Plan to Lower Housing Costs for Working Families

The White House Fact Sheet outlines the plan in more detail, with a focus on “Building and preserving over 2 million new homes to lower rents and the cost of buying a home.” 

Here are the highlights:

Lowering the Costs of Homeownership

President Biden‘s strategy focuses on a substantial increase in the construction and renovation of homes, aiming to lower both rental prices and the costs associated with home buying. To lower costs, his plan proposes:

  • Mortgage Relief Credit: A proposed $5,000 annual tax credit for middle-class, first-time homebuyers for two years, designed to ease the financial burden of mortgages. This initiative targets more than 3.5 million middle-class families, making it easier for them to own their first home. 
  • Down Payment Assistance for First-Generation Homeowners: An initiative offering up to $25,000 in down payment assistance to help first-generation homebuyers overcome the barriers to homeownership, benefiting approximately 400,000 families.
  • Lowering Closing Costs for Refinancing: The plan also covers policies to reduce closing costs by waiving the requirement for lender’s title insurance. Note that this applies only to refinances.

Building and Preserving Homes

The plan also includes tax credits to stimulate the construction and renovation of over 2 million homes, aimed at closing the housing supply gap:

  • Tax Credits for Affordable Housing Construction: The expansion of the Low-Income Housing Tax Credit will build or preserve 1.2 million affordable rental units. In addition, the Neighborhood Homes Tax Credit is an initiative to construct or renovate over 400,000 affordable homes.
  • Housing Expansion: A $20 billion competitive grant fund would support the construction of affordable multifamily rental units.

Lowering Costs for Renters

Finally, the plan addresses challenges faced by renters. Biden announced measures to tackle unfair practices in the rental market, including:

  • Rent Gouging by Corporate Landlords: With the Strike Force on Unfair and Illegal Pricing, Biden aims to curb illegal behaviors including information sharing, price fixing and rent inflation.
  • Rental Junk Fees: The plan aims to eliminate excessive “junk fees” in the rental market, ranging from online “convenience fees” to charges like basic services like mail sorting and trash collection. 

For a complete overview of the plan, head to the White House Fact Sheet.