What is the $25,000 Downpayment Toward Equity Act?
Key takeaways
- The Downpayment Toward Equity Act is a bill that was originally introduced during the 2021-2022 Congressional session and would grant up to $25,000 to first-generation first-time homebuyers in the U.S. who meet certain eligibility standards.
- The grant funds could be used to cover various homebuying expenses, including the down payment, closing costs or a mortgage interest rate buydown.
- A Biden-era measure, the bill is unlikely to get passed under the Trump Administration.
Achieving the American dream of homeownership is a challenging goal, especially at a time when interest rates are high and home prices are prohibitively expensive for many hopeful homebuyers. Adding in closing costs and down payment requirements pushes homeownership even further out of reach. That’s where the Downpayment Toward Equity Act could help.
What is the Downpayment Toward Equity Act?
The Downpayment Toward Equity Act, also known as the $25,000 First-Time Buyer Home Grant, is a bill introduced in Congress in 2021. The proposed bill aims to help make homeownership more accessible for first-generation, first-time homebuyers in the United States, particularly Black, Hispanic, Native American and Asian-American buyers.
To accomplish this, the bill would provide eligible individuals with as much as $25,000 to cover costs like a down payment or closing expenses, or even to buy down the mortgage interest rate.
If adopted, the U.S. Department of Housing and Urban Development (HUD) would oversee the program, along with some community organizations, and would be administered at the state level. However, the measure has yet to be adopted by Congress, and it seems increasingly unlikely that it will be.
What is the status of the $25,000 first-time homebuyer grant?
The Downpayment Toward Equity Act has not passed as of this writing. That means you can’t apply for or receive a $25,000 homebuyer grant at this time.
After originally being introduced in 2021, the Downpayment Toward Equity Act was part of both the 2022-2023 and 2023-2024 Congressional sessions. However, both sessions ended without a vote on the measure. As of May 2025, the bill has not been reintroduced.
Both of the bill’s main sponsors, Rep. Maxine Waters (D-Calif.) in the House and Sen. Raphael Warnock (D-GA), still hold office, so it is possible the measure could be reintroduced in the future.
Who is eligible for a $25,000 grant?
If passed, the Downpayment Toward Equity Act would be available to eligible first-generation, first-time homebuyers. The eligibility requirements include:
- First-time homebuyer status: You can’t have owned a home or co-signed a mortgage in the past three years.
- First-generation homebuyer status: Your parents, legal guardians, spouse or domestic partner can’t have owned a home in the past three years. If you were placed in foster care and your income falls within the program’s limits (below), you’d also be considered a first-generation homebuyer.
- Income limits: Your income can’t equal more than 120 percent of the median income in the area in which you’re buying the home or the area in which you currently live. In higher-cost areas (determined by HUD), that limit would be higher.
- Mortgage type: You can use the funds if getting a conventional loan backed by Fannie Mae or Freddie Mac, an FHA loan, VA loan, USDA loan, Section 184 loan or any other loan considered a qualified mortgage.
- Property type: You can use the funds if you’re buying a single-family detached home, condo, co-op or manufactured home, as well as a multifamily home up to four units, so long as you’re living in one of those units.
- Homebuyer education: You’ll need to participate in a HUD-approved housing counseling program (or a homebuyer education course if counseling isn’t available in the time frame you’re buying the home).
Another important point is that you’ll need to live in the home you bought (with the help of the grant) for at least five years. Otherwise, you might need to repay some or all of the funds, depending on how soon you move out.
When will you be able to fill out the $25,000 first-time homebuyer grant application?
Because the measure has not been passed, it is unclear when those eligible for the first-time homebuyer grant might be able to fill out an application.
Are there other versions of the $25,000 Downpayment Toward Equity Act?
The Downpayment Toward Equity Act has gone through various iterations since its introduction in 2021 as H.R. 4495. The most recent version of the measure is the Downpayment Toward Equity Act of 2024, which was introduced to the Senate in 2024.
Like previous versions, the 2024 bill would still establish a grant program directed at low-income, first-time, first-generation homebuyers and be administered by HUD. The 2024 bill also still allows eligible individuals to use the $25,000 for the down payment on a home, closing costs and the reduction of mortgage interest rates. The funds could also go toward home modifications to accommodate people with disabilities.
The HELPER (Homes for Every Local Protector, Educator, and Responder) Act is another bill focused on helping homebuyers. It was originally introduced in the 2021-2022 legislative session and again in 2023-2024. The latest iteration of the bill was introduced in March 2025 by Rep. John Rutherford (R-FL) and Sen. Ashley Moody (R-FL). The measure is designed to amend the FHA mortgage insurance program to give eligible first responders, law enforcement officers and teachers access to no-down payment loans.
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