Downpayment Toward Equity Act of 2021
Bill: H.R.4495 | Sponsor: Rep. Waters, Maxine (D-CA)
Policy area: Housing and Community Development

Summary:
Downpayment Toward Equity Act of 2021
This bill establishes a grant program through the Department of Housing and Urban Development for states and other entities to provide qualifying assistance to certain first-time, first-generation home buyers in purchasing their first homes. Qualifying assistance includes assistance for mortgage down payments, mortgage closing costs, reduction of mortgage interest rates, subsidies for shared equity homes, or for certain preoccupancy modifications to a home to accommodate persons with disabilities.
The bill also establishes grant requirements regarding home buyer income, types of housing, homeowner occupancy, types of mortgages, and home buyer counseling.

To provide downpayment assistance to first-generation homebuyers to 
address multigenerational inequities in access to homeownership and to 
narrow and ultimately close the racial homeownership gap in the United 
                    States, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Downpayment Toward Equity Act of 
2021''.

SEC. 2. FIRST-GENERATION DOWNPAYMENT ASSISTANCE DOWNPAYMENT PROGRAM.

    (a) Establishment.--The Secretary of Housing and Urban Development 
shall carry out a program under this Act to provide grants to States 
and eligible entities to provide financial assistance under this Act to 
first-generation homebuyers to assist them with acquiring owner-
occupied primary residences.
    (b) Allocation.--After reserving amounts as required under sections 
6(d) and 8(b), any remaining amounts made available to carry out this 
Act shall be allocated as follows:
            (1) States.--75 percent of such amounts shall be allocated 
        among States in accordance with a formula established by the 
        Secretary, which shall take into consideration--
                    (A) adult population size (excluding existing 
                homeowners);
                    (B) median area home prices; and
                    (C) racial disparities in homeownership rates.
            (2) Eligible entities.--25 percent of such amounts shall be 
        made available only to eligible entities on a competitive 
        basis.
    (c) Assistance.--Amounts from a grant under this Act shall be used 
only to provide assistance--
            (1) on behalf of a qualified homebuyer; and
            (2) for--
                    (A) costs in connection with the acquisition, 
                involving an eligible mortgage loan, of an eligible 
                home, including downpayment costs, closing costs, and 
                costs to reduce the rates of interest on eligible 
                mortgage loans;
                    (B) for subsidies to make shared equity homes 
                affordable to eligible homebuyers by discounting the 
                price for which the home will be sold and to preserve 
                the home's affordability for subsequent eligible 
                buyers; and
                    (C) for pre-occupancy home modifications required 
                to accommodate qualified homebuyers or members of their 
                household with disabilities.
    (d) Amount.--A grant of assistance under this Act--
            (1) may be provided on behalf of any qualified homebuyer 
        only once; and
            (2) may not exceed $20,000, or $25,000 in the case of a 
        qualified homebuyer who is a socially and economically 
        disadvantaged individual, except that the Secretary may 
        increase such maximum limitation amounts in the case of 
        qualified homebuyers acquiring residences located in high-cost 
        areas, as determined based on median home prices or prices of 
        residences under a shared equity homeownership program.
    (e) Layering of Assistance.--Assistance from grant amounts under 
this Act may be provided on behalf of a qualified homebuyer who is 
receiving assistance from other sources, including other State, 
Federal, local, private, public, and nonprofit sources, for acquisition 
of an eligible home.
    (f) State Administration.--
            (1) In general.--The Secretary shall require that each 
        State receiving grant amounts under this Act administer the 
        program to provide assistance with such amounts through the 
        State housing finance agency for the State or such other 
        housing agency of the State as the Secretary finds appropriate, 
        except that any such agency may, at the option of the agency, 
        contract with a nonprofit entity, including a housing 
        counseling agency approved by the Secretary, to administer such 
        assistance.
            (2) Affirmatively furthering fair housing.--For a State to 
        be eligible for a grant under this Act, the State shall be in 
        compliance with the Secretary's regulations implementing the 
        requirement under section 808(e)(5) of the Fair Housing Act (42 
        U.S.C. 3608(e)(5)) to affirmatively further fair housing.
            (3) Prohibition of priority.--In selecting qualified 
        homebuyers for assistance with grant amounts under this Act, a 
        State or eligible entity may not provide any priority or 
        preference for homebuyers who are acquiring eligible homes with 
        a mortgage loan made, insured, guaranteed, or otherwise 
        assisted by the State housing finance agency for the State, any 
        other housing agency of the State, or an eligible entity when 
        applicable.
    (g) Reallocation of State Amounts.--The Secretary shall reallocate 
any grant funds under this Act allocated for a fiscal year that remain 
unused at the end of such fiscal year among States and eligible 
entities that demonstrate to the Secretary the capacity to expend such 
amounts and that are satisfactorily meeting the goals of the program 
under this Act, as determined by the Secretary.
    (h) Uniformity and Program Standardization.--The Secretary shall 
establish a uniform set of requirements to which each State and 
eligible entity receiving grant amounts under this Act shall comply.

SEC. 3. QUALIFIED HOMEBUYERS.

    (a) Requirements.--Assistance from grant amounts under this Act may 
be provided only on behalf of a homebuyer who meets all of the 
following requirements:
            (1) Income.--The household of the homebuyer has an income 
        that does not exceed--
                    (A) 120 percent of median income for the area (as 
                determined by the Secretary) within which--
                            (i) the eligible home to be acquired using 
                        such assistance is located; or
                            (ii) the place of residence of the 
                        homebuyer is located; or
                    (B) in the case of a homebuyer acquiring an 
                eligible home that is located in a high-cost area. as 
                determined by the Secretary, 180 percent of the median 
                income for the area within which the eligible home to 
                be acquired using such assistance is located; and
            (2) First-time homebuyer.--The homebuyer, as self-attested 
        by the homebuyer, is a first-time homebuyer, as such term is 
        defined in section 92.2 of the Secretary's regulations (24 
        C.F.R. 92.2), except that for purposes of this subsection the 
        reference in such section 92.2 to the American Dream 
        Downpayment Initiative shall be considered to refer to the 
        program under this Act.
            (3) First-generation homebuyer.--The homebuyer is, as self-
        attested by the homebuyer--
                    (A) an individual--
                            (i) whose parents or legal guardians do not 
                        have any present residential ownership interest 
                        in any State; and
                            (ii) whose spouse, or domestic partner, and 
                        each member of whose household has not, during 
                        the 3-year period ending upon acquisition of 
                        the eligible home to be acquired using such 
                        assistance, had any present ownership interest 
                        in a principal residence in any State; or
                    (B) an individual who has at any time been placed 
                in foster care.
    (b) Reliance on Borrower Attestations.--No creditor shall be 
subject to liability, including monetary penalties or requirements to 
indemnify a Federal agency or repurchase a loan that has been sold or 
securitized, for the provision of downpayment assistance under this Act 
to a borrower who does not meet the eligibility requirements if the 
creditor does so in good faith reliance on borrower attestations of 
eligibility required by this Act or regulation.

SEC. 4. ELIGIBLE HOMES.

    (a) In General.--Assistance from grant amounts under this Act may 
be provided only in connection with the acquisition by a qualified 
homebuyer of a residential property that--
            (1) consists of 1 to 4 dwelling units; and
            (2) will be occupied by the qualified homebuyer, in 
        accordance with such assurances and commitments as the 
        Secretary shall require, as the primary residence of the 
        homebuyer, subject to section 3.
    (b) Repayment of Assistance.--
            (1) Requirement.--The Secretary shall require that, if a 
        homebuyer on behalf of whom assistance is provided from grant 
        amounts under this Act fails or ceases to occupy the property 
        acquired using such assistance as the primary residence of the 
        homebuyer, except in the case of assistance is provided in 
        connection with the purchase of a primary residence through a 
        shared equity homeownership program, the homebuyer shall repay 
        to the Secretary--
                    (A) 100 percent of the amount of such assistance, 
                if such failure to occupy commences before the 
                expiration of the 12-month period beginning on the date 
                of acquisition;
                    (B) 80 percent of the amount of such assistance, if 
                such failure to occupy commences after the expiration 
                of the 12-month period beginning on such date of 
                acquisition but before the expiration of the 24-month 
                period beginning on such date of acquisition;
                    (C) 60 percent of the amount of such assistance, if 
                such failure to occupy commences after the expiration 
                of the 24-month period beginning on such date of 
                acquisition but before the expiration of the 36-month 
                period beginning on such date of acquisition;
                    (D) 40 percent of the amount of such assistance, if 
                such failure to occupy commences after the expiration 
                of the 36-month period beginning on such date of 
                acquisition but before the expiration of the 48-month 
                period beginning on such date of acquisition; and
                    (E) 20 percent of the amount of such assistance, if 
                such failure to occupy commences after the expiration 
                of the 48-month period beginning on such date of 
                acquisition but before the expiration of the 60-month 
                period beginning on such date of acquisition.
            (2) Limitation.--Notwithstanding paragraph (1), if a 
        homebuyer on behalf of whom assistance is provided from grant 
        amounts under this Act experiences an unforeseen hardship, such 
        as death or military deployment, or sells the property acquired 
        with such assistance before the expiration of the 60-month 
        period beginning on such date of acquisition and the capital 
        gains from such sale are less than the amount the homebuyer is 
        required to repay the Secretary under paragraph (1), the 
        homebuyer shall not be liable to the Secretary for repayment of 
        the amount of such shortage.
    (c) Community Land Trusts and Shared Equity Homeownership 
Programs.--If assistance from grant amounts under this Act are provided 
in connection with an eligible home made available through a community 
land trust or shared equity homeownership program, such assistance 
shall remain in the community land trust or shared equity property upon 
transfer of the property to keep the home affordable to the next 
eligible community land trust or shared equity homebuyer.

SEC. 5. ELIGIBLE MORTGAGE LOANS.

    Assistance from grant amounts under this Act may be provided only 
in connection with the acquisition of an eligible home involving a 
residential mortgage loan that--
            (1) meets the underwriting requirements and dollar amount 
        limitations for acquisition by the Federal National Mortgage 
        Association or the Federal Home Loan Mortgage Corporation;
            (2) is made, insured, or guaranteed under title II of the 
        National Housing Act (12 U.S.C. 1707 et seq.) or title V of the 
        Housing Act of 1949 (42 U.S.C. 1471 et seq.);
            (3) is a qualified mortgage, as such term is defined in 
        section 129C(b)(2) of the Truth in Lending Act (15 U.S.C. 
        1639c(b)(2));
            (4) is made, insured, or guaranteed under chapter 37 of 
        title 38, United States Code; or
            (5) is guaranteed under section 184 of the Housing and 
        Community Development Act of 1992 (12 U.S.C. 1715z-13a).

SEC. 6. HOUSING COUNSELING REQUIREMENT.

    (a) In General.--Except as provided pursuant to section 3, 
assistance with grant amounts under this Act may not be provided on 
behalf of qualified homebuyer unless such homebuyer has completed a 
program of counseling with respect to the responsibilities and 
financial management involved in homeownership before entering into a 
sales purchase agreement or loan application, except as provided under 
subsection (c), as the Secretary shall require, provided through a 
counseling agency approved by the Secretary. Such program may be 
delivered virtually, by telephone, or any other method the Secretary 
determines acceptable and shall include providing information on fair 
housing rights and on the availability of post-purchase housing 
counseling opportunities and instruction on how to file a fair housing 
complaint.
    (b) Alternative Requirement.--The Secretary shall provide that if a 
qualified homebuyer is unable to complete the requirement under 
subsection (a) within 30 days due to housing counseling agency capacity 
issues, a State or eligible entity may allow such qualified homebuyer 
to complete alternative homebuyer education to fulfill the requirement 
under subsection (a), including homebuyer education that is provided 
through an online platform, and such qualified homebuyer shall be made 
aware of the availability of post-purchase housing counseling 
opportunities.
    (c) Referral Upon Mortgage Denial.--The Secretary shall require 
that any qualified homebuyer who has completed a counseling program 
referred to in subsection (a) or alternative requirement pursuant to 
subsection (b), who receives a commitment for assistance with grant 
amounts under this Act and who applies for an eligible mortgage loan 
for acquisition of an eligible home and is denied such mortgage loan, 
shall be referred to a counseling agency described in subsection (a) 
for counseling relating to such denial and for re-qualification. An 
eligible homebuyer may be re-qualified at least one additional time in 
a calendar year, or more as determined by the Secretary.
    (d) Funding.--Of any amounts appropriated to carry out this Act, 
the Secretary shall use not less than 5 percent for costs of providing 
counseling referred to in subsection (a).

SEC. 7. ADMINISTRATIVE COSTS.

     Of any grant amounts under this Act received by a State or 
eligible entity, the State or eligible entity may use not more than 5 
percent for administrative costs of and training for carrying out the 
program of the State or eligible entity to provide assistance with such 
grant amounts.

SEC. 8. REPORTS.

    (a) In General.--For each fiscal year during which the Secretary 
makes grants under this Act, the Secretary shall submit to the 
Congress, and make publicly available online in an easily accessible 
location on the website of the Department, a report that shall 
include--
            (1) demographic information regarding applicants for and 
        recipients of assistance provided pursuant to this Act, 
        including race, ethnicity, and gender;
            (2) information regarding the types and amount of 
        assistance provided, including downpayment assistance, 
        assistance with closing costs, and assistance to reduce 
        mortgage loan interest rates;
            (3) information regarding properties acquired using such 
        assistance, including location, property value, property type, 
        and first mortgage type and investor.
All data shall be disaggregated by zip code or census tract level, 
whichever is most feasible, and demographic information, including 
race, ethnicity, and gender, and any other data points the Secretary 
deems appropriate especially to observe equitable outcomes to ensure 
the program is affirmatively furthering fair housing.
    (b) Capacity Building.--Of any amounts appropriated to carry out 
this Act, the Secretary shall use not more than 1 percent to assist 
States and eligible entities to develop capacity to meet the reporting 
requirements under subsection (a). The Secretary shall encourage States 
and eligible entities to consult with community-based and nonprofit 
organizations that have as their mission to advance fair housing and 
fair lending.
    (c) Privacy Requirements.--
            (1) In general.--Each State and eligible entity that 
        receives a grant under this Act shall establish data privacy 
        and security requirements for the information described in 
        subsection (a) that--
                    (A) include appropriate measures to ensure that the 
                privacy of the individuals and households is protected;
                    (B) provide that the information, including any 
                personally identifiable information, is collected and 
                used only for the purpose of submitting reports under 
                subsection (a); and
                    (C) provide confidentiality protections for data 
                collected about any individuals who are survivors of 
                intimate partner violence, sexual assault, or stalking.
            (2) Statistical research.--
                    (A) In general.--The Secretary--
                            (i) may provide full and unredacted 
                        information provided under subsection (a), 
                        including personally identifiable information, 
                        for statistical research purposes in accordance 
                        with existing law; and
                            (ii) may collect and make available for 
                        statistical research, at the census tract 
                        level, information collected under paragraph 
                        (1).
                    (B) Application of privacy requirements.--A 
                recipient of information under subparagraph (A) shall 
                establish for such information the data privacy and 
                security requirements described in paragraph (1).

SEC. 9. COMPELLING INTEREST STUDY.

    The Secretary and the Attorney General shall survey and compile 
evidence to determine whether or not there is a sufficient history of 
discrimination in housing and the appropriate remedy to redress such 
historic discrimination. The Secretary shall make conclusions and 
recommendations based on the evidence and provide States and eligible 
entities granted awards under this Act an opportunity to modify their 
programs for assistance under this Act according to such 
recommendations.

SEC. 10. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) Affirmatively further fair housing.--The term 
        ``affirmatively further fair housing'' has the same meaning as 
        defined by the Secretary to implement section 808(e)(5) of the 
        Fair Housing Act (42 U.S.C. 3608(e)(5)).
            (2) Community land trust.--The term ``community land 
        trust''' means a nonprofit organization or State or local 
        governments or instrumentalities that--
                    (A) use a ground lease or deed covenant with an 
                affordability period of at least 30 years or more to--
                            (i) make homeownership units affordable to 
                        households; and
                            (ii) stipulate a preemptive option to 
                        purchase the affordable homeownership units so 
                        that the affordability of the units is 
                        preserved for successive income-eligible 
                        households; and
                    (B) monitor properties to ensure affordability is 
                preserved.
            (3) Eligible entity.--The term ``eligible entity'' means--
                    (A) a minority depository institution, as such term 
                is defined in section 308 of the Financial Institutions 
                Reform, Recovery, and Enforcement Act of 1989 (12 
                U.S.C. 1463 note);
                    (B) a community development financial institution, 
                as such term is defined in section 103 of the Riegle 
                Community Development and Regulatory Improvement Act of 
                1994 (12 U.S.C. 4702), that is certified by the 
                Secretary of the Treasury and targets services to 
                minority and low-income populations and provides 
                services in neighborhoods having high concentrations of 
                minority and low-income populations; and
                    (C) any other nonprofit, mission-driven entity that 
                the Secretary finds targets services to minority and 
                low-income populations and provides services in 
                neighborhoods having high concentrations of minority 
                and low-income populations.
            (4) Eligible home.--The term ``eligible home'' means a 
        residential dwelling, including a unit in a condominium or 
        cooperative project or a manufactured housing unit, that meets 
        the requirements of section 4.
            (5) Eligible mortgage loan.--The term ``eligible mortgage 
        loan'' means a residential mortgage loan that meets the 
        requirements of section 5.
            (6) Qualified homebuyer.--The term ``qualified homebuyer'' 
        means a homebuyer who meets the requirements of section 3, and 
        includes homebuyers consisting of multiple individuals, co-
        purchasers, and multi-member households.
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (8) Shared equity homeownership program.--
                    (A) In general.--The term ``shared equity 
                homeownership program'' means affordable homeownership 
                preservation through a resale restriction program 
                administered by a community land trust, other nonprofit 
                organization, or State or local government or 
                instrumentalities.
                    (B) Affordability requirements.--Any such program 
                under subparagraph (A) shall--
                            (i) provide affordable homeownership 
                        opportunities to households; and
                            (ii) utilize a ground lease, deed 
                        restriction, subordinate loan, or similar legal 
                        mechanism that includes provisions ensuring 
                        that the program shall--
                                    (I) maintain the homeownership unit 
                                as affordable for subsequent very low-, 
                                low-, or moderate-income families for 
                                an affordability term of at least 30 
                                years after recordation;
                                    (II) apply a resale formula that 
                                limits the homeowner's proceeds upon 
                                resale; and
                                    (III) provide the program 
                                administrator or such administrator's 
                                assignee a preemptive option to 
                                purchase the homeownership unit from 
                                the homeowner at resale.
            (9) Socially and economically disadvantaged individual.--
        The term ``socially and economically disadvantaged individual'' 
        means an individual who meets the following requirements:
                    (A) Social disadvantage.--
                            (i) In general.--The individual is a member 
                        of a socially disadvantaged group, whose 
                        members have historically been subjected to 
                        racial or ethnic discrimination within the 
                        United States because of their identity as 
                        members of such group without regard to their 
                        individual qualities.
                            (ii) Presumption; rebuttal.--An individual 
                        identifying as Black, Hispanic, Native 
                        American, or Asian American, or any combination 
                        thereof, shall be presumed to be socially 
                        disadvantaged for purposes of clause (i). Such 
                        presumption may be rebutted by such individual 
                        with credible evidence to the contrary.
                            (iii) Burden of proof.--An individual who 
                        does not identify as described in clause (ii) 
                        shall be required to establish individual 
                        social disadvantage for purposes of clause (i) 
                        by a preponderance of the evidence.
                            (iv) Rules.--The Secretary may issue 
                        regulations as necessary to establish 
                        procedures for complying with this 
                        subparagraph.
                    (B) Economic disadvantage.--The individual has an 
                income that meets the requirements under section 3(a).
            (10) State.--The term ``State'' means any State of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the United States Virgin Islands, Guam, the 
        Commonwealth of the Northern Mariana Islands, American Samoa, 
        and the tribal government of any Indian tribe, as such term is 
        defined in section 4 of the Native American Housing Assistance 
        and Self-Determination Act of 1996 (25 U.S.C. 4103).

SEC. 11. REGULATIONS.

    The Secretary shall issue any regulations necessary to implement 
this Act.

SEC. 12. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated for grants under this Act 
$100,000,000,000, and any amounts appropriated pursuant to this section 
shall remain available until expended.
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