I 117th CONGRESS 2d Session H. R. 8340 IN THE HOUSE OF REPRESENTATIVES July 12, 2022 Mr. Swalwell (for himself and Mrs. Hayes ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To direct the Secretary of Education to award grants to provide financial assistance to certain educators to make down payments on certain homes, and for other purposes.

1. Short title This Act may be cited as the Educator Down Payment Assistance Act of 2022 . 2. First-time homebuyer down payment assistance program (a) Establishment The Secretary of Education shall award grants, on a competitive basis, to eligible entities to award subgrants to eligible educators in accordance with subsection (d). (b) Application An eligible entity seeking a grant under this section shall submit to the Secretary an application in such form, at such time, and containing such information as the Secretary determines appropriate, including an assurance that such entity will utilize an existing, or establish a new, down payment assistance program to award subgrants to eligible educators. (c) Geographic areas In the case of a geographic area that is served by an eligible entity that is a unit of local government and an eligible entity that is a local educational agency, the Secretary may only award a grant to 1 such entity in such geographic area. (d) Subgrants (1) In general An eligible entity that receives a grant under subsection (a) shall use such grant funds to award subgrants to eligible educators. (2) Application An eligible educator seeking a subgrant under this subsection shall submit to the eligible entity an application in such form, at such time, and containing such information as the eligible entity determines appropriate, including an assurance that such educator will— (A) complete the housing counseling required under paragraph (8); and (B) use an eligible residential mortgage loan to purchase an eligible dwelling. (3) Subgrant uses An eligible educator that receives a subgrant under this subsection shall use such subgrant funds to pay, with respect to the purchase of an eligible dwelling using an eligible residential mortgage loan, for— (A) direct down payment costs associated with such purchase; (B) closing costs associated with such purchase; and (C) costs related to reducing the rates of interest on such eligible residential mortgage loan associated with such purchase. (4) Subgrant amount (A) In general Except as provided under subparagraph (B), a subgrant awarded under this subsection may not exceed $25,000. (B) Exception In the case of an eligible educator purchasing an eligible dwelling that is located in a high-cost area (as determined by the Secretary based on area median income), a subgrant awarded under this subsection may exceed $25,000. (5) Subgrant limit An eligible educator may only receive 1 subgrant under this subsection. (6) Additional funds An eligible entity may award a subgrant under this subsection to an eligible educator who is receiving funds from other sources, including other State, Federal, local, private, public, and nonprofit sources, for the purpose of purchasing an eligible dwelling. (7) Occupancy requirement (A) In general An eligible educator who is awarded a subgrant under this subsection and makes a down payment on an eligible dwelling with such subgrant funds shall use such dwelling as a primary residence for a period of not less than 3 years. (B) Enforcement (i) Return of funds An eligible educator who does not comply with the requirement under subparagraph (A) shall return to the eligible entity the total amount of the subgrant funds awarded to such educator under this subsection. (ii) Timing Such funds shall be returned in accordance with clause (i) not later than 1 year after such educator ceases to use such dwelling as a primary residence in violation of the requirement under subparagraph (A). (iii) Exception An eligible educator who does not comply with the requirement under subparagraph (A) due to an emergency event shall not be required to return subgrant funds under clause (i). (8) Housing counseling requirement (A) In general An eligible educator shall provide to the eligible entity, in accordance with clause (iii), proof of completion of a program of housing counseling that— (i) is offered— (I) by a housing counseling agency that is approved by the Department of Housing and Urban Development; and (II) in person, virtually, by telephone, or by any other method determined by the Secretary to be acceptable; (ii) includes information with respect to— (I) the responsibilities and financial management required with respect to owning a home; and (II) fair housing rights and how to file a fair housing complaint; and (iii) is completed prior to filling out a loan application or entering into a sales purchase agreement. (B) Funding The Secretary shall reserve not less than 5 percent of the funds made available to carry out this section to pay for the costs of the housing counseling required under subparagraph (A) for eligible educators. (e) Definitions In this section: (1) Eligible dwelling (A) In general The term eligible dwelling means a residential property, an apartment, a condominium, or a manufactured dwelling unit. (B) Limitation An eligible dwelling does not include a residential property that contains more than 4 dwelling units. (2) Eligible educator The term eligible educator means a public elementary or secondary school teacher, principal, paraprofessional, school leader, or other staff who— (A) is a first-time homebuyer; (B) has served in their position or another position in the educational system for not less than a total of 3 years (without regard to whether such years were consecutive); (C) has a qualifying income; and (D) is in good standing. (3) Eligible entity The term eligible entity means— (A) a unit of local government; (B) a State housing finance agency; or (C) a local educational agency. (4) Eligible residential mortgage loan The term eligible residential mortgage loan means a residential mortgage loan that— (A) meets the underwriting requirements and dollar amount limitations for acquisition by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation; (B) 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. ); (C) 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) ); (D) is made, insured, or guaranteed under chapter 37 of title 38, United States Code; or (E) is guaranteed under section 184 of the Housing and Community Development Act of 1992 ( 12 U.S.C. 1715z–13a ). (5) Emergency event The term emergency event includes— (A) military deployment; (B) divorce; (C) death of an eligible educator or spouse; and (D) other similar unforeseen events as determined by the Secretary. (6) ESEA terms The terms elementary school , local educational agency , other staff , secondary school , and Secretary have the meanings given such terms in section 8101 of the Elementary and Secondary Education Act of 1965 ( 20 U.S.C. 7801 ). (7) First-time homebuyer The term first-time homebuyer has the meaning given such term in section 92.2 of title 24, Code of Federal Regulations (as in effect on the date of the enactment of this Act), except that any reference in such section to the American Dream Downpayment Initiative shall be deemed to be a reference to the grant program established under this section. (8) Good standing (A) In general The term good standing means that, with respect to an eligible educator and for the period described in subparagraph (B), such educator has not received disciplinary action from the local educational agency that serves the school at which such educator works as an educator. (B) Period The period described in subparagraph (A)— (i) begins on the date that is 3 years before the date described in clause (ii); and (ii) ends on the date on which such educator submits an application under subsection (c). (9) Qualifying income (A) In general The term qualifying income means, except as provided in subparagraph (B), an income that does not exceed 120 percent of the area median income in which the eligible dwelling to be purchased is located. (B) High-cost area If the Secretary makes a determination that an area described in subparagraph (A) is a high-cost area, the qualifying income shall be an income that does not exceed 180 percent of the median income of such area.