With an ambitious new plan, U.S. Representative Salud Carbajal introduced a federal pilot program designed to empower first-time homebuyers across the nation with crucial down payment assistance. Rep. Carbajal hosted a press conference in front of the Santa Barbara Association of Realtors on Tuesday, June 17, to introduce the American Dream for All Act. The legislation would help first-time homebuyers purchase homes by creating a federal pilot program that provides down payment assistance loans across states, territories, and tribes. The bill draws inspiration from the California Dream for All Shared Appreciation Loan Program, which has provided loans to more than 4,000 eligible applicants in California since its inception two years ago.
Homeownership is the most significant factor in wealth generation, said Santa Barbara Association of Realtors’ President Elect Jennifer Berger. A report from the Urban Institute revealed that 80 percent of all generational wealth in the U.S. is transferred through homeownership. By inheriting property, families can provide future generations with a significant asset that promotes financial security.
Rep. Carbajal voiced concern that the American dream of homeownership is slipping away, yet asserted that this bill embodies his belief that “if you’ve done the work, this country will help you.” He expressed confidence that the bill will attract bipartisan support. He believes its pragmatic approach, its alignment with the American Dream, and the fact that it does not entirely rely on federal tax dollars will appeal to both sides of the aisle.
First-time homebuyers qualifying for the program could receive a down payment loan of up to 20 percent. This loan, plus a matching percentage of the home’s appreciated value, would be repaid only when the home is sold. Repayments would then be reinvested into the program, potentially supporting new homeowners for generations with sufficient return on investment. However, the bill defers to the Appropriations Committee for initial funding amounts, said staffers at the congressmember’s office.
A press release from Carbajal’s office outlined the qualifications for elibility in the proposed bill:
An eligible borrower must meet the following criteria:
- (1) is a citizen or permanent resident of US,
- (2) is a first-time homebuyer and/or first-generation homebuyer,
- (3) has completed a buyer education course,
- (4) has a certificate of completion from a housing counseling agency, and
- (5) has an income not more than 150 percent of area median income (AMI) and must self-attest they don’t have the ability to pay more than 5 percent of total value of the home for which the loan under this section is used.
