BAM Key Details:

  • The Biden-Harris Administration has released data showing substantial federal investment in homeownership programs. They’ve also announced new key initiatives to make homeownership accessible to more Americans. 
  • One of those key initiatives is a $16 billion investment in the Neighborhood Homes Tax Credit, which would finance the building or rehabilitation of over 400,000 homes, with an average investment of under $40,000 per home. 
  • Other initiatives include allowing homebuyers to leverage rental income from accessory dwelling units (ADUs), expanding mortgage lending for U.S. Tribes, and expanded home retention assistance programs for U.S. veterans.

Yesterday, the White House released a statement sharing data on the Biden-Harris Administration’s substantial investment in housing affordability, including its policy (announced earlier this year) reducing mortgage insurance fees for FHA borrowers. 

The statement also announced new actions and proposals, all with the aim of supporting homeownership and making it accessible to more Americans. 

While these initiatives have increased accessibility to cost-saving programs for home buyers—particularly lower-income and minority borrowers and U.S. veterans—they haven’t increased the number of homes on the market. 

So, calling on Congress to greenlight more funding, the statement revealed two key proposals, one of which would allocate $16 billion for the Neighborhood Homes Tax Credit, which would finance the construction or rehabilitation of more than 400,000 homes. The average investment per home would be less than $40,000.  

The President also proposed a $10 billion down payment assistance program, alongside a $100 million pilot program, to put homeownership within reach for more first-generation and/or low-income first-time buyers. 

Here’s what you need to know. 

Data shows strong investment in homeownership-related programs

The U.S. Treasury Department released data on President Biden’s Investing in America agenda, the goal of which is to support existing homeowners and make homeownership more accessible through over $12 billion in funding. Federal agency data shows record support by the President for low- and middle-income borrowers and first-time homebuyers. 

In fact, according to the U.S. Department of Housing and Urban Development (HUD), the Federal Housing Administration’s (FHA) first-time homebuyer rate under the Biden-Harris Administration has reached its highest level since at least 2000. 

Since the early days of the Administration, FHA has helped almost 1.8 million Americans with purchase mortgages—83.6% (or 1.5 million) of whom are first-time homebuyers. 

The American Rescue Plan’s Homeowner Assistance Fund (HAF) provided assistance to almost 40,000 homeowners at risk of foreclosure. 

In this past fiscal year, the U.S. Department of Agriculture (USDA) provided over 7,100 direct housing loans—the highest number since 2010—subsidizing loan rates down to 1% for certain borrowers. About 55% of these were female-headed households; 22% identify as Black or African American. 

The Department of Veterans Affairs (VA) reports that in 2023, it assisted 145,480 U.S. veterans to avoid foreclosure and/or retain homeownership. 

New initiatives to support homeownership

While the above-mentioned programs have saved many Americans a substantial amount on the purchase or retention of their homes, homeownership remains out of reach for too many. 

And that is why the Biden-Harris Administration is determined to “aggressively increase homeownership opportunities” through initiatives like the following: 

  • Leveraging income from accessory dwelling units (ADUs) — allowing homebuyers to leverage existing or potential income from accessory dwelling units (ADUs) to qualify for an FHA-insured mortgage
  • Increasing mortgage opportunities for Native Americans — awarding $9 million in loans to nine Native American Community Development Institutions to make homeownership accessible to more Native Americans on Tribal Lands
  • Simplifying home repairs financing — revising the 203(k) Rehabilitation Mortgage Insurance Program to make it easier for homeowners and homebuyers to finance needed home repairs, potentially adding to the supply of livable housing on the market
  • Assisting at-risk homeowners — streamlining and simplifying rules to help homeowners struggling to pay their mortgage
  • Assisting Veteran homeowners in retaining their homes — providing a long-term solution for Veteran borrowers who are behind on their mortgage payments but who do not qualify for traditional assistance programs. 
  • Test innovative homeownership models — piloting alternative eligibility criteria for Community Land Trust Organizations through the USDA’s Section 502 Direct Home Loan Program, which could potentially expand affordable homeownership opportunities. 

These programs all focus on eligibility for financial assistance, which will help a subset of Americans who could not otherwise purchase a home or retain the one they have. And while these programs no doubt result in substantial savings for qualifying borrowers, they do little or nothing to increase housing supply at any price point. 

The proposals mentioned above—specifically the $16 billion for the construction and/or rehabilitation of 400,000 homes—are completely dependent on congressional approval. 

That said, the information is worth passing on to any clients who may find these programs helpful—to themselves or to someone they know.