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Suzanne De Vita is a senior editor on Bankrate’s Home Lending team, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters.
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The Downpayment Toward Equity Act — also known as the $25,000 First-Time Home Buyer Grant or the Downpayment Toward Equity Act of 2023 — is a proposed bill that would give eligible first-generation first-time homebuyers in the U.S. up to $25,000 to put toward the purchase of a home. The funds could be used for costs such as the down payment, mortgage closing costs or a lower mortgage rate.
The bill allows for grants to any eligible first-generation, first-time homebuyer, but is particularly aimed at helping “socially and economically disadvantaged homebuyers,” including Black, Hispanic, Native American and Asian American buyers.
The bill would authorize the U.S. Department of Housing and Urban Development (HUD) to oversee the program, which would be administered at the state level and by some community-based organizations. It calls for $100 billion in funding.
The Downpayment Toward Equity Act has not passed as of this writing. That means you can’t apply for or receive a $25,000 homebuyer grant at this time.
If passed, the Downpayment Toward Equity Act would be available to eligible first-generation, first-time homebuyers. The eligibility requirements include:
Importantly, you’ll also need to live in the home you bought (with the help of the grant) for at least five years. Otherwise, you might need to repay some or all of the funds, depending on how soon you move out.
The Downpayment Toward Equity Act of 2023 (H.R. 4231) is the latest iteration of a bill proposing a $25,000 homebuyer grant. The bill was first introduced in July 2021 as the Downpayment Toward Equity Act of 2021 (H.R. 4495). It regained momentum in March 2023 when it was included in President Biden’s 2024 budget proposal.
In addition to the Downpayment Toward Equity Act, there are other proposed bills focused on helping homebuyers, including the:
Not at this time. The Downpayment Toward Equity Act of 2023, which would give eligible first-generation, first-time homebuyers a grant of up to $25,000, has not passed as of this writing.
