Congress Proposes $100 Billion Boost to First-Generation Homeownership Through Downpayment Toward Equity Act of 2025
WASHINGTON, D.C. — A comprehensive effort to ease access to homeownership for first-time, first-generation homebuyers is underway in Congress through the Downpayment Toward Equity Act of 2025, a bill proposing $100 billion in federal assistance for housing-related costs.
Spearheaded by House Financial Services Committee Ranking Member Maxine Waters, along with 
Congressman Al Green, Congresswoman Ayanna Pressley, and Congresswoman Sylvia Garcia, announced reintroduction of the Downpayment Toward Equity Act. The legislation is aimed at narrowing the wealth gap and stabilizing long-term economic outcomes for millions of American households.
In the House of Representatives, the bill was introduced on July 16, 2021, as H.R. 4495 by Rep. Maxine Waters. It made its way to the Senate, and it was introduced on September 30, 2021, as S. 2920 by Senator Raphael Warnock.
Though it has experienced a bumpy ride the legislation addresses one of the largest financial barriers facing aspiring homeowners today: the upfront costs associated with buying a home. These costs, including down payments and closing fees, have become increasingly prohibitive as home prices and mortgage rates have surged over the past four years. As of mid-2025, the 30-year fixed-rate mortgage stands at approximately 7%, while average home prices have risen nearly 50% since May 2020.
While overall mortgage originations hit record highs in 2020 and 2021 during a period of low interest rates, many creditworthy individuals—particularly those lacking inherited wealth—were unable to enter the market. Between 2023 and 2024, the share of first-time homebuyers dropped to a historic low of 24%, while the average age of first-time buyers climbed to 38. These trends reflect a tightening of access to homeownership at a time when housing remains the principal source of household wealth in the United States. In 2024, homeowners held over 40 times the median net worth of renters.
The Downpayment Toward Equity Act seeks to reverse this trend by offering targeted financial assistance. Eligible buyers may receive up to $20,000 in aid, with additional funding—up to $25,000—for individuals identified as socially and economically disadvantaged. The bill stipulates that recipients must be both first-time and first-generation homebuyers, with no ownership in the past three years and no parental history of homeownership during that same period. Former foster youth who meet income thresholds also qualify.
Income eligibility is capped at 120% of the Area Median Income (AMI), with exceptions allowing for up to 180% AMI in high-cost housing markets. Qualified recipients must intend to purchase an owner-occupied primary residence, which may include one- to four-unit homes, condominiums, cooperatives, or manufactured homes.
Funds would be administered through the Department of Housing and Urban Development (HUD), which would allocate 75% of funds to states based on a formula considering population, local home prices, and homeownership disparities.
The remaining 25% would be distributed on a competitive basis to eligible organizations, including some community development and financial institutions.
To ensure long-term success and responsible homeownership, the bill includes a mandatory housing counseling requirement. HUD-approved counseling agencies would receive 5% of the total appropriation to help prospective homebuyers complete education programs. In cases where counseling capacity is limited, participants can fulfill the requirement through alternative education options. Applicants denied financing after receiving commitment letters would be referred for further assistance and requalification.
Eligible mortgage types include loans backed by federal entities such as Fannie Mae, Freddie Mac, FHA, USDA, and VA, as well as HUD’s Section 184 program. These provisions are intended to streamline access for buyers using mainstream, federally backed mortgage products.
HUD would also be required to submit annual performance reports to Congress, measuring
the bill’s impact on homeownership trends and administrative effectiveness. Up to 1% of total funding is set aside to build state and local capacity to manage and implement program requirements. States may use up to 5% of their allocated funds for administrative expenses and training.
A key provision of the bill authorizes HUD and the Department of Justice to conduct studies that examine compelling interest in providing aid to specific disadvantaged groups, with recommendations that could influence how funds are allocated in future years.
Support for the legislation spans a wide array of housing, lending, and community organizations, including the Mortgage Bankers Association, National Housing Conference, Habitat for Humanity International, and the National Association of Realtors. Additionally, numerous local and regional housing advocacy organizations have endorsed the bill, highlighting its potential to provide critical assistance in underserved areas.
The Downpayment Toward Equity Act is positioned as both a practical and strategic response to widening gaps in housing access and personal wealth accumulation. By reducing entry costs, the legislation aims to offer more Americans the opportunity to achieve homeownership—a key driver of long-term financial stability. If enacted, the $100 billion in authorized funding will remain available until fully expended, ensuring sustained support for eligible buyers in the coming years.
While the bill’s future depends on the legislative process and budget negotiations in Congress, its supporters argue that it represents a necessary step to recalibrate a housing market increasingly defined by exclusionary barriers and rising costs. The measure is currently under committee review, with further debate expected in the coming months.
