Lenders, economists question first-time homebuyer bills

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While the first-time homebuyers welcomed news of a down payment assistance grant or tax credit, the mortgage industry and housing experts expressed deep skepticism.

Two proposals under consideration in Congress aim to give first-time homebuyers a leg up by offering a grant at closing time, or a tax credit after the fact. Loan officers — who are monitoring the progress of both legislative efforts closely — aren’t in love with either of those options.

One bill, which U.S. Rep. Maxine Waters, D–Calif., unveiled earlier this month, would give first-time, first-generation homebuyers an upfront grant of up to $25,000. Experts have said that determining who would qualify for the benefit could be a significant obstacle.

It’s not wise to bet against legislation backed by Waters, who chairs the House Financial Services Committee. Still, the White House indicated her bill is not a part of President Joe Biden’s infrastructure package — and any standalone bill would be on a difficult road to passage.

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