A newly proposed bill, the Homeownership Promise Act, introduced by Sen. Jeff Merkley (D-Ore.) and co-sponsored by Sen. Ron Wyden (D-Ore.), aims to provide up to $50,000 in federal funds for first-time homebuyers.
The bill proposes a $5-to-$1 federal match for down payments, allowing for a maximum Homeownership Promise Account value of $60,000 ($10,000 from the homebuyer and $50,000 from the government).
"Working families should be able to afford a decent home in a decent community," Merkley stated. "For millions of young Americans, homeownership remains further out of reach than ever before, keeping them from establishing the foundation that has enabled middle-class families to build equity for generations."
He added, "My new Homeownership Promise Act would restore the promise of homeownership—one of the foundations that working families need to thrive—by allowing all Americans to save for a home and live that piece of the American Dream."
Participants can deposit funds into these accounts and withdraw them for emergencies, but the federal matching funds would only be accessible once the original balance is restored.
This initiative comes in response to the rising age of first-time homebuyers, which has reached a median of 40 years old, up from 33 in 2019. The share of first-time homeowners has also dropped to a record low of 21%.
While the bill has no income limit for first-time buyers, participants must complete HUD-approved housing counseling and purchase a home at or below the area's median single-family home price.
The bill has been referred to the Senate Committee on Banking, Housing, and Urban Affairs.
However, some experts express concerns. Ken Johnson, a finance professor at the University of Mississippi, told Realtor.com that the plan could exacerbate an already overheated housing market. Johnson argues that the core issue is a shortage of housing supply, stating, "The real symptom of what’s going on is that we’re short in supply. We’re dangerously short in supply. We just cannot build homes fast enough. You can’t make it easier for people to buy homes, and offer easier credit to buy homes, when you have the housing market so overpriced."
