HUD could offer first-time homebuyers mortgages if Congress provides funding

The U.S. Department of Housing and Urban Development (HUD) could offer mortgages to eligible first-time homebuyers. Buyers must never have owned a main home. Covered homes include single-family houses, condos, and certain manufactured homes that one or two individuals would occupy permanently as their main home. When signing the loan, buyers must hold a Homeownership Promise Account, have completed HUD-approved housing counseling, and have a credit score of at least 500. Manufactured homes must be permanently attached to land the buyer owns or buys with the home, with the property legally treated as real estate. Alternatively, manufactured homes may be in nonprofit, government, or resident-owned communities with a lease longer than the loan or a permanent right to occupy the site. Congress would still need to provide funding.

HUD mortgages would have fixed interest rates, 30-year terms, and down payments of at least 3.5%. Home prices, excluding closing costs, could not exceed the area's median single-family purchase price, with HUD adjustments for housing type and whether the home is new or older. The interest rate could not exceed the rate needed to cover the government's cost of making the loan. Loans would follow federal qualified-mortgage standards, which set lending safeguards, as closely as practical. The proposal authorizes funding but does not set aside money for the loans.