Sec. 40201. First-Generation Downpayment Assistance
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In addition to amounts otherwise available, there is appropriated to the First Generation Downpayment Fund established under subsection
(b)for fiscal year 2022, out of any money in the Treasury not otherwise appropriated— $6,825,000,000 for the First-Generation Downpayment Assistance Fund under this section for allocation among States that the Secretary of Housing and Urban Development has not found to be out of compliance with the obligation to affirmatively further fair housing, in accordance with a formula established by the Secretary, which shall take into consideration adult population size excluding homeowners, median area home prices, and racial disparities in homeownership rates, to carry out the eligible uses of the Fund as described in subsection (c); $2,275,000,000 for the First-Generation Downpayment Assistance Program under this section for competitive grants to eligible entities that the Secretary has not found to be out of compliance with the obligation to affirmatively further fair housing, to carry out the eligible uses of the Fund as described in subsection (d); $500,000,000 for the costs of providing housing counseling required under the First-Generation Downpayment Assistance Program under subsection (c)(1); and $400,000,000 for the costs to the Secretary of administering and overseeing the implementation of the First-Generation Downpayment Assistance Program, including information technology, financial reporting, programmatic reporting, ensuring fair housing and fair lending compliance, research and evaluations, technical assistance to recipients of amounts under this section, and other cross-program costs in support to programs administered by the Secretary in this Act, and other costs; the Secretary may transfer and merge accounts set aside under this clause to section 40301. Amounts appropriated by this section shall remain available until September 30, 2031. The Secretary of Housing and Urban Development shall establish and manage a fund to be known as the First Generation Downpayment Fund (in this section referred to as the Fund ) for the uses set forth in subsection (d). The Secretary shall allocate and award funding provided by subsection
(a)as provided under such subsection not later than 12 months after the date of the enactment of this section. If a State or eligible entity does not demonstrate the capacity to expend grant funds provided under this section, the Secretary shall reallocate the grant funds of such grantee among States and eligible entities that demonstrate to the Secretary the capacity to expend such amounts and that are satisfactorily meeting the goals of this section. States and eligible entities receiving grants from the Fund shall— use such grants to provide assistance on behalf of a qualified homebuyer who has completed a program of housing counseling before entering into a sales purchase agreement, as the Secretary shall require, provided through a housing counseling agency approved by the Secretary for— 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; 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 homebuyers; and pre-occupancy home modifications that may be necessary to meet required property standards or accommodate qualified homebuyers or members of their household with disabilities; use not more than 10 percent of their grant allocation or award for administrative costs and training for carrying out the program of the State or eligible entity to provide assistance with such grant amounts, as well as to develop the capacity to track and monitor program outcomes in consultation with community-based and nonprofit organizations that have as their mission to advance fair housing and fair lending; and comply with the obligation to affirmatively further fair housing, as defined by the Secretary to implement section 808(e)(5) of the Fair Housing Act ( 42 U.S.C. 3608(e)(5) ), in any program or activity related to the use of such funds. Assistance under this section— may be provided to or on behalf of any qualified homebuyer only once; may not exceed the greater of $20,000 or 10 percent of the purchase price in the case of a qualified homebuyer, not to include assistance received under subsection (d)(1)(A)(iii) for disability related home modifications, except that the Secretary may increase such maximum limitation amounts in the case of a qualified homebuyer who is economically disadvantaged; and may be provided to or 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. In selecting qualified homebuyers for assistance with grant amounts under this section, 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. The Secretary shall require that, if a homebuyer to or on behalf of whom assistance is provided from grant amounts under this section 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 principal residence through a shared equity homeownership program, the homebuyer shall repay to the State or eligible entity, as applicable, in a proportional amount of the assistance the homebuyer receives based on the number of years they have occupied the eligible home up to 5 years, except that no assistance shall be repaid if the qualified homebuyer occupies the eligible home as a primary residence for 5 years or more. Notwithstanding subparagraph (A), a homebuyer to or on behalf of whom assistance is provided from grant amounts under this section shall not be liable to the State or eligible entity for the repayment of the amount of such shortage if the homebuyer fails or ceases to occupy the property acquired using such assistance as the principal residence of the homebuyer at least in part because of a hardship, such as death or military deployment; a financial hardship, such as a significant reduction in income, or increase in medical expenses; relocation for a reason related to domestic violence, dating violence, sexual assault, or stalking, as defined in the Secretary’s regulations implementing the Violence Against Women Act; or relocation for a reason related to the homebuyer or a member of the household’s disabilities; or another hardships based on criteria established by the Secretary, 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 to a bona fide purchaser in an arm’s length transaction are less than the amount the homebuyer is required to repay the State or eligible entity under subparagraph (A). If assistance from grant amounts under this section is 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. No additional documentation beyond the borrower’s attestation shall be required to demonstrate eligibility under subparagraphs
(B)and
(C)of subsection (e)(6) and no State, eligible entity, or 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, based on the provision of assistance under this section to or on behalf of a borrower who does not meet the eligibility requirements under such subparagraphs if the creditor does so in good faith reliance on borrower attestations of eligibility required under such subparagraphs. The Secretary may require the reporting of such information on the use of grants provided from the Fund as the Secretary may require to carry out this subsection. For purposes of this section, the following definitions shall apply: The term community land trust " means a nonprofit organization or State or local government, agencies or instrumentalities thereof, that— use a ground lease or deed covenant with an affordability period of at least 30 years to— make homeownership units affordable to households; and 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 monitor properties to ensure affordability is preserved. The term eligible entity means— 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); 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 low-income and socially disadvantaged populations and provides services in neighborhoods having high concentrations of minority, low-income and socially disadvantaged populations; and any other nonprofit, mission-driven entity that the Secretary finds has a track record of providing assistance to homeowners, targets services to low-income and socially disadvantaged populations, and provides services in neighborhoods having high concentrations of minority, low-income, or socially disadvantaged populations. The term eligible home means a residential dwelling, including a unit in a condominium or cooperative project or a manufactured housing unit, that— consists of 1 to 4 dwelling units; and 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. The term eligible mortgage loan means a single-family residential mortgage loan that— meets the underwriting requirements and dollar amount limitations for acquisition by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation; is made, insured, or guaranteed under any program administered by the Secretary; is made, insured, or guaranteed under title V of the Housing Act of 1949 ( 42 U.S.C. 1471 et seq. ); 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) ); or is made, insured, or guaranteed for the benefit of a veteran. The term first-generation homebuyer means a homebuyer that is, as attested by the homebuyer— an individual— whose living parents or legal guardians do not, to the best of the individual’s knowledge, have any present fee simple ownership interest in a principal residence in any State, excluding ownership of heir property; who, if no parents or legal guardians are living upon acquisition of the eligible home to be acquired using such assistance, to the best of the individual’s knowledge, their parents or legal guardians did not have any ownership interest in a principal residence in any State at the time of their death, excluding ownership of heir property; and whose spouse or domestic partner 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, excluding ownership of heir property, whether the individual is a co-borrower on the loan or not; or an individual who has at any time been placed in foster care or institutional care whose spouse or domestic partner has not, during the 3-year period ending upon acquisition of the eligible home to be acquired using such assistance, had any ownership interest in a principal residence in any State, excluding ownership of heir property, whether such individuals are co-borrowers on the loan or not. The term qualified homebuyer means a homebuyer— having an annual household income that is less than or equal to— 120 percent of median income, as determined by the Secretary, for— the area in which the home to be acquired using such assistance is located; or the area in which the place of residence of the homebuyer is located; or 140 percent of the median income, as determined by the Secretary, for the area within which the eligible home to be acquired using such assistance is located if the homebuyer is acquiring an eligible home located in a high-cost area; who is a first-time homebuyer, as such term is defined at 42 U.S.C. 12704 , except that ownership of heir property shall not be treated as owning a home for purposes of determining whether a borrower qualifies as a first-time homebuyer; and who is a first-generation homebuyer. The term Secretary means the Secretary of Housing and Urban Development. 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. Any such program under subparagraph
(A)shall— provide affordable homeownership opportunities to households; and utilize a ground lease, deed restriction, subordinate loan, or similar legal mechanism that includes provisions ensuring that the program shall— 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; apply a resale formula that limits the homeowner’s proceeds upon resale; and provide the program administrator or such administrator’s assignee a preemptive option to purchase the homeownership unit from the homeowner at resale. 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, and American Samoa. The term heir property means residential property for which title passed by operation of law through intestacy and is held by two or more heirs as tenants in common. The Secretary shall have authority to issue such regulations or other notices, guidance, forms, instructions, and publications as may be necessary or appropriate to carry out the programs, projects, or activities authorized under this section, including to ensure that such programs, projects, or activities are completed in a timely and effective manner.
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Sec. 40201
First-Generation Downpayment Assistance
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