What Is the Biden Neighborhood Homes Investment Act?
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What is this proposed tax credit?
As high interest rates and housing prices weigh down potential home buyers, the Neighborhood Homes Investment Act could be on the way to help.
The proposed federal initiative would enable better affordability for home buyers by injecting $16 billion for adding more housing stock to the market and $10.1 billion for down payment assistance.
While it still needs to pass all three branches of government, it’s helpful to understand the legislation if it gets signed into law. Here’s what you need to know.
Check your home buying eligibility. Start here
What is the Neighborhood Homes Investment Act?
Introduced in 2023, the Neighborhood Homes Investment Act (NHIA) is a bipartisan bill aiming to boost housing affordability through increased development and down payment assistance.
As it currently stands, it would devote $16 billion toward the building and rehabilitation of an estimated 400,000 homes, according to a White House statement. The proposal would also allocate $10 billion in down payment assistance and a $100 million pilot program to supplement opportunities for first-generation and/or low wealth first-time homebuyers.
Verify your home buying eligibility. Start here
“Everyone deserves a safe and affordable place to call home. Our bipartisan tax credit will drive housing investments and revitalize neighborhoods … while keeping them affordable for low- and moderate-income families,” Senator Ben Cardin (D-Md.) said in a press release. “This credit will allow individuals in these communities to build equity and wealth for their families.”
The ongoing dearth of available for-sale properties has held back the entire housing market. Coupled with the rapid mortgage rate growth from 2023, fewer borrowers can afford homeownership and fewer homeowners want to sell.
“The number of homes that are available for sale is the lowest or close to the lowest it’s ever been,” said Mortgage Bankers Association Deputy Chief Economist Joel Kan. “A lot of that has been driven by the lock-in effect — many borrowers have lower mortgage rates than what’s being offered right now, so they’re just not willing to sell or list their homes.”
Has the Biden Neighborhood Homes Investment Act been passed?
As of November 2023, the Biden Neighborhood Homes Investment Act has not been passed, so the funding is not yet available.
Congress still needs to approve the proposed legislation before the President signs it into law. There is no set timeline for the act to pass. It is possible that it could be passed in the near future, but it is also possible that it could be delayed or even defeated in the process.
Other policies in the legislative pipeline
Even more federal help for borrowers could potentially be on the way as well. Similar to the NHIA, two other notable bills intended to help home buyers hang in bureaucratic limbo.
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