H.R. 7244: First-Time Home Buyers Match Act

The bill, known as the First-Time Home Buyers Match Act, proposes to establish a pilot program aimed at assisting first-time home buyers in saving for and purchasing a home. Here’s a breakdown of the key components of the bill:

Program Establishment

The Secretary of Housing and Urban Development (HUD) is required to set up a pilot program that will begin within a year after the bill's enactment. This program will support up to 20,000 eligible individuals each year.

Matching Deposits

Under the program, HUD will match deposits made by eligible prospective home buyers into qualifying savings accounts. The match will be the lesser of:

• 50% of the amount deposited during the year, or
• $5,000.

Account Restrictions

Participants cannot receive matching funds if their savings account balance meets or exceeds 10% of the area median value of a single-family home in their local market.

Eligibility Requirements

To qualify for the matching funds, participants must:

• Complete homeownership counseling from a HUD-certified agency.
• Be U.S. citizens aged 18 or older.
• Be first-time home buyers, defined as per the Cranston Gonzalez National Affordable Housing Act.
• Have no more than $75,000 in liquid assets.
• Earn no more than 120% of the area median income for their locality.

Usage of Funds

The funds received through the matching program can be used for specific purposes related to the purchase of a single-family home, including:

• Down payments
• Title insurance and closing costs
• Real estate agent commissions
• Appraisal and inspection fees
• Loan origination fees
• Qualified home repairs, as mandated by a specified inspection process.

Second Mortgage Structure

The matching funds will be treated as a second mortgage on the purchased home, conditioned as follows:

• The second mortgage term will be 36 months.
• The amount owed will decrease by 1/36 each month following the recipient's move-in date.
• If the participant sells or vacates the home, they must repay the remaining amount of the second mortgage to HUD.

Program Duration and Reporting

The pilot program is set to last for 5 years. After 180 days of its termination, the Secretary of HUD must provide a report assessing the program's effectiveness. This report will cover:

• The total number of participants.
• The average savings and total matched funds distributed.
• The success rates in purchasing homes using the program.
• Demographic data of participants.
• Comparison of mortgage default rates with a controlled group.
• Assessment of the management of savings accounts by institutions.
• Use of funds for home repairs.
• Overall impact on participants' ability to buy homes.

Definitions

The bill provides definitions for key terms, including:

• Eligible prospective borrower: A U.S. citizen, aged 18 or older, who meets the financial criteria and is a first-time homebuyer.
• Qualifying home repairs: Repairs addressing critical issues identified in an inspection report, completed within a specific timeframe.
• Qualifying savings account: An account at an insured bank or credit union opened by the eligible borrower.

Relevant Companies

None found.