First-Time Homebuyer Assistance, Flood Insurance Survive in Biden’s Build Back Better Act
A version of the first-time homebuyer assistance plan President Joe Biden proposed as a candidate, along with a rescue of the nation’s flood insurance program, made it into the Build Back Better Act released by the House Rules Committee on Thursday.
While many of the president’s priorities, such as paid family leave, were stripped out of the bill as Congress reduced its original $3.5 trillion 10-year price tag to $1.75 trillion, those key housing provisions, as well as more than $90 billion for low-income rental units, survived.
The final bill provides $10 billion of grants to first-generation, first-time homebuyers to use as down payments equal to $20,000 or 10% of a property’s purchase price. It also provides $5 billion for the same group of buyers to pay so-called discount points when originating their mortgages to lower the interest rates they pay.
It also rescues the National Flood Insurance Program by forgiving the $20.5 billion it owed the government that threatened to make it insolvent. People who buy homes in floodplains are required to get flood insurance to qualify for federally backed mortgages. Without the program, about 40,000 home sales a month would be nixed, according to the National Association of Realtors.
“That should help the program remain solvent,” said Jaret Seiberg, managing director at Cowen Group in Washington D.C.
The 1,684-page bill also provides $600 million to update flood maps and $600 million to subsidize flood insurance premiums for those who earn up to 120% of an area’s median income. Flood insurance premiums have been rising after the risk model was adjusted to account for more severe weather caused by climate change.
There’s also money in the legislation, H.R. 5376, for $65 billion to rehabilitate public housing, $10 billion to refurbish low-income housing, $15 billion to build new low-income housing and $500 million for housing for elderly Americans.
It's not yet clear when House Speaker Nancy Pelosi will bring the legislation to the floor for a vote.
Many of the housing provisions had seemed destined for the chopping block as lawmakers wrangled to come up with a bill that would win support every Democratic vote in the evenly-split Senate.
A group of legislators led by House Financial Services Chair Maxine Waters, D-CA, and Senate Banking Chair Sherrod Brown, D-OH, held a press conference last week on the steps of the Capitol Building to urge the inclusion of funds for housing.
“Housing is fundamental to an economy that works for all,” Brown said at last week’s press conference.