H.R. 4023: American Dream for All Act

The American Dream for All Act aims to help certain individuals become homeowners by providing financial assistance for down payments. It does this through a pilot program established by the Secretary of Housing and Urban Development (HUD). Here are the key components of the bill:

Program Overview

The bill directs HUD to create a pilot program to give grants to eligible entities, which can include state agencies, Indian tribes, and local housing finance agencies. These entities will set up revolving loan funds to offer down payment assistance loans to qualifying borrowers.

Eligibility for Grants

To qualify for the grants, entities must:

• Be a state agency, Indian tribe, or an organization related to these groups.
• Establish a revolving loan fund specifically for down payment assistance.

Distribution of Funds

Grants will be allocated based on the population of the state or tribe. The funds must be used to create loans that assist eligible borrowers with their down payments on homes, specifically between 3% to 20% of the home’s purchase price. Eligible entities can choose to distribute funds on a first-come, first-served basis or through a lottery.

Loan Terms and Repayment

Borrowers who receive assistance must repay the loan when they sell their home. The repayment amount will depend on the home's appreciation or depreciation:

• If the home appreciates, the borrower repays the loan amount plus a percentage of the appreciation.
• If the home depreciates, they repay only the loan amount.

Eligible borrowers must also meet specific criteria to qualify for the assistance, including being first-time or first-generation homebuyers and having an income not exceeding 150% of the area median income.

Loan Limits

The maximum amount of assistance varies by location:

• $150,000 for high-cost states or tribes.
• $100,000 for medium-cost states or tribes.
• $50,000 for low-cost states or tribes.

Administrative Costs

Entities may only use up to 15% of the grant funds for administrative expenses.

Reporting Requirements