H.R. 4069: Downpayment Toward Equity Act of 2025

This bill, titled the Downpayment Toward Equity Act of 2025, aims to provide financial assistance to first-generation homebuyers in the United States, with a focus on addressing multigenerational inequities in access to homeownership and narrowing the racial homeownership gap. Here are the main components of the bill:

First-Generation Downpayment Assistance Program

The bill establishes a program administered by the Secretary of Housing and Urban Development (HUD) to offer grants to states and eligible organizations. The goal is to assist first-generation homebuyers in acquiring their primary residences. Funding will be distributed as follows:

• **75%** to states, based on a formula considering potential qualified homebuyers and local median home prices.
• **25%** to eligible entities through a competitive process.

Types of Assistance

The financial assistance from the program can be used for various costs associated with home acquisition, including:

• Downpayment and closing costs.
• Subsidies to reduce purchase prices in shared equity home programs.
• Home modifications for buyers with disabilities.

Grant Amounts and Limitations

A homebuyer can receive assistance once, with grants not exceeding the greater of **$20,000** or **10%** of the home's purchase price. The Secretary may increase these limits for socially and economically disadvantaged buyers or in high-cost areas.

Assistance can also be layered with help from other sources, and states must manage the disbursement of funds through their housing finance agencies.

Eligibility Criteria

To qualify for assistance, a homebuyer must meet certain criteria:

• Income restrictions: Must not exceed 120% of the median income for the area, or 140% in high-cost areas.
• Must be a first-time homebuyer and a first-generation homebuyer as defined in the bill.

Eligible Homes and Mortgage Loans

Assistance can be applied only to residential properties of 1 to 4 units, occupied as the buyer's primary residence. The mortgage loans must also meet specific criteria, such as conforming to federal standards or being guaranteed for veterans.

Housing Counseling Requirement

Before receiving assistance, qualified homebuyers must complete a housing counseling program focusing on homeownership responsibilities. Exceptions apply if the counseling agency cannot accommodate within a certain timeframe.

Administrative and Reporting Requirements

States and eligible entities can cover some administrative costs. HUD will report annually on demographics and types of assistance provided, aiming for transparency and accountability in addressing housing disparities.

Funding Authorization

The bill authorizes **$100 billion** for grants under this act, with funds remaining available until fully spent.

Compliance and Evaluation

States must demonstrate adherence to fair housing requirements and will be subject to oversight to ensure grant funds are used effectively. If compliance issues arise, HUD may reallocate funds to other states or entities based on their performance.

Relevant Companies

• PHM (PulteGroup, Inc.): As a home construction company, PulteGroup may see increased demand for homes from first-time buyers taking advantage of the downpayment assistance provided by this bill.
• DHI (D.R. Horton, Inc.): As one of the largest homebuilders in the U.S., the company may benefit from the increased pool of first-time homebuyers utilizing the proposed assistance.
• LEN (Lennar Corporation): Similar to other builders, Lennar is likely to be impacted by a rise in first-time buyers as a result of this legislation, potentially boosting sales and home construction projects.