II 117th CONGRESS 1st Session S. 2920 IN THE SENATE OF THE UNITED STATES September 30, 2021 Mr. Warnock (for himself, Mr. Brown , Mr. Kaine , Mr. Van Hollen , Ms. Warren , and Mr. Warner ) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL 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.

1. Short title This Act may be cited as the Downpayment Toward Equity Act of 2021 . 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 Seventy-five 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 Twenty-five 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) 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) 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. 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. (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. 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 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. 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 ). 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 a 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 by 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). 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. 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 of Housing and Urban Development, 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; and (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). 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. 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 ). 11. Regulations The Secretary shall issue any regulations necessary to implement this Act. 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.