Senate amendment would help first-time buyers cover closing costs

First-time homebuyers could get a little more breathing room at the moment that often makes or breaks a purchase. A Senate amendment would provide additional funding for the HOME Investment Partnerships program and direct it toward new construction, acquisition and rehabilitation of single-family homes. It would also let assistance grants cover down payments, closing costs and interest-rate buydowns.

For families who can handle a monthly mortgage but struggle to get to the closing table, that matters. The up-front bill is where many would-be buyers fall out of the market, especially in starter-home price ranges where competition is tight and cash on hand matters as much as income.

What the aid can pay for

The money would be allocated under the HOME program formula, the long-running federal housing aid stream that states and localities can use for housing development. The amendment would point that money at single-family homes, not just broad housing efforts, and would make the dollars usable for building new homes, buying existing ones and rehabilitating properties that need work.

The buyer side is even more direct. First-time buyer grants could help with down payments, closing costs and interest-rate buydowns, which can lower the amount a borrower has to bring to the table or reduce the monthly payment at the start of a loan.

A federal look at investor buying

The same amendment would also require reports on large institutional ownership of single-family homes. The Comptroller General of the United States would have to report on how that ownership affects housing availability and affordability for renters and homebuyers, and on whether the policy is reducing demand from large institutional investors and expanding homeownership.

A separate Housing and Urban Development report, written with several other federal officials, would examine whether the definition of a large institutional investor needs to change, what the financial impact is on renters and homebuyers, and what legislative fixes could better increase the supply and affordability of homes for purchase by individual buyers.

The reports are not the main event for a family trying to buy a house this spring. But they show the larger anxiety running through the amendment: if too many starter homes end up in institutional hands, the market gets harder to enter before a buyer ever gets to the closing table.

When it takes effect

The amendment’s requirements and prohibitions would take effect 180 days after enactment and would be repealed 15 years later.