Sec. 301. First-Generation Downpayment Assistance
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In addition to amounts otherwise available, there is appropriated to the First Generation Downpayment Fund to increase equal access to homeownership, established under subsection
(b)for fiscal year 2026, out of any money in the Treasury not otherwise appropriated— $6,825,000,000, to remain available until September 30, 2028, for the First-Generation Downpayment Assistance Fund under this section for allocation to each State in accordance with a formula established by the Secretary, which shall take into consideration best available data to approximate the number of potential qualified homebuyers as defined in subsection (e)(7) as well as median area home prices, to carry out the eligible uses of the Fund as described in subsection (d); $2,275,000,000, to remain available until September 30, 2028, for the First-Generation Downpayment Assistance Program under this section for competitive grants to eligible entities to carry out the eligible uses of the Fund as described in subsection (d); $500,000,000, to remain available until September 30, 2033, for the costs of providing housing counseling required under the First-Generation Downpayment Assistance Program under subsection (d)(1); and $400,000,000, to remain available until September 30, 2033, for the costs to the Secretary of Housing and Urban Development of administering and overseeing the implementation of the First-Generation Downpayment Assistance Program, including information technology, financial reporting, programmatic reporting, research and evaluations, which shall include the program’s impact on racial and ethnic disparities in homeownership rates, technical assistance to recipients of amounts under this section, and other cross-program costs in support of programs administered by the Secretary in this Act, and other costs. 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 may recapture amounts remaining available to a grantee that has not demonstrated the capacity to expend such funds in a manner that furthers the purposes of this section and shall reallocate such amounts among any other States or eligible entities that have demonstrated to the Secretary the capacity to expend such amounts in a manner that furthers the purposes of this section. States and eligible entities receiving grants from the Fund shall use such grants to provide assistance to or on behalf of a qualified homebuyer who has completed a program of housing counseling provided through a housing counseling agency approved by the Secretary or other adequate homebuyer education before entering into a sales purchase agreement 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; and pre-occupancy home modifications to accommodate qualified homebuyers or members of their household with disabilities; Assistance under this section— may be provided to or on behalf of any qualified homebuyer; may be provided to or on behalf of any qualified homebuyer only once in the form of grants or forgivable, non-amortizing, non-interest-bearing loans that may only be required to be repaid pursuant to paragraph (d)(4); and 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)(C) for disability related home modifications, except that the Secretary may increase such maximum limitation amounts for qualified homebuyers who are economically disadvantaged. 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, nor may the State or eligible entity seek to recoup any funds associated with the provision of downpayment assistance to the qualified homebuyer, whether through premium pricing or otherwise, except as provided in paragraph
(4)of this subsection or otherwise authorized by the Secretary. 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 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, 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). No additional documentation beyond the borrower’s attestation shall be required to demonstrate eligibility under subparagraphs
(B)and
(C)of subsection (e)(7) and no State, eligible entity, or creditor shall be subject to liability based on the accuracy of such attestation. States and eligible entities receiving grants from the Fund may use a portion of such grants for administrative costs up to the limit specified by the Secretary. For purposes of this section, the following definitions shall apply: 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 minority and low-income populations or provides services in neighborhoods having high concentrations of minority and low-income populations; any other nonprofit entity that the Secretary finds has a track record of providing assistance to homeowners, targets services to minority and low-income or provides services in neighborhoods having high concentrations of minority and low-income populations; and a unit of general local government, as such term is defined in section 102 of the Housing and Community Development Act of 1974 ( 42 U.S.C. 5302 ). The term eligible home means a residential dwelling that— consists of 1 to 4 dwelling units; and will be occupied by the qualified homebuyer 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 by the Rural Housing Administrator of the Department of Agriculture; 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 parents or legal guardians do not, or did not at the time of their death, to the best of the individual’s knowledge, have any present ownership interest in a residence in any State, excluding ownership of heir property or ownership of chattel; 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 residence in any State, excluding ownership of heir property or ownership of chattel, 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 residence in any State, excluding ownership of heir property or ownership of chattel, whether such individuals are co-borrowers on the loan or not. 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 term ownership interest means any ownership, excluding any interest in heir property, in— real estate in fee simple; a leasehold on real estate under a lease for not less than ninety-nine years which is renewable; or a fee interest in, or long-term leasehold interest in, real estate consisting of a one-family unit in a multifamily project, including a project in which the dwelling units are attached, or are manufactured housing units, semi-detached, or detached, and an undivided interest in the common areas and facilities which serve the project. 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 in section 104 of the Cranston-Gonzalez National Affordable Housing Act ( 42 U.S.C. 12704 ), except that for the purposes of this section the reference in such section 104 to title II shall be considered to refer to this section, and 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 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 Secretary shall have authority to issue such regulations, notices, or other guidance, forms, instructions, and publications to carry out the programs, projects, or activities authorized under this section to ensure that such programs, projects, or activities are completed in a timely and effective manner.
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Sec. 301
First-Generation Downpayment Assistance
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