Biden's $25,000 First Time Home Buyer Program Explained!

the biden administration has released a 25 000 first time home buyer grant that they are trying to get passed into law now if this is something that gets fully enacted it could affect and help a lot of you so today we are going to talk through some of the criteria that is being proposed currently for this grant and how you can apply i'm nicole narc arkansas real estate broker and welcome back to my channel with videos to help you find your way home so this is not the first grant program or incentive for first-time homebuyers the biden administration has proposed since running for office and being elected so let's talk through what has changed compared to some of the past proposals the proposed 15 000 tax credit for first-time home buyers has recently been scrapped this is something that it does not look like the administration is currently going to be proposing or pushing forward anymore however this has been replaced with the down payment toward equity act of 2021. now with this there are very strict criteria that have been announced that come with this proposal now this is something that differs greatly from that fifteen 15 000 tax credit that me and several others were informing you guys about through our videos earlier this year so first let's talk through who is eligible for these funds the first criteria that you have to meet in order to be eligible for this is you have to be a first-time home buyer now a first-time home buyer by definition is someone who has not owned a home in the past three years so even if you bought a home and owned it over three years ago if you have not had a deed in your name for the past three years you can be considered a first-time homebuyer again so you have to not only be a first-time homebuyer you also have to be a first generation home buyer so this means that your parents never owned a home or maybe your parents owned a home and they lost it due to foreclosure or they were forced to short sale and they have not bought a home since and this also applies to anyone who was in the foster care system you would also be considered a first generation home buyer now in my opinion this in and of itself is probably going to be the factor that makes a lot of people not eligible for this specific proposal right now in addition to meeting these two criteria it is important to note that there are income limits as well so you must make at or below 120 of the area's median income we've talked about this before and this is actually a little bit higher than a lot of other first-time homebuyer and down payment assistance programs a lot of those are you must make less than 50 or 80 percent so the fact that this is a hundred and twenty percent of the area's median income is actually pretty good now of course there are exceptions for our high cost areas if you are in somewhere like new york city san francisco the areas that are deemed high cost would have different qualifying criteria and you could make up to 180 of the average median income in those areas and still be able to qualify so these three criteria here first time home buyers first generation home buyers and making at or below essentially 120 of the area's median income these are the qualifiers all three that you have to meet in order to be eligible for 20 000 of that 25 000 first-time homebuyer program so you may be thinking nicole where's the other 5 000 let me tell you the remaining 5 000 is specifically set aside for socially or economically disadvantaged individuals so let's talk about the definition of what that means from the proposal i have pulled this verbiage directly from the proposal and it says the act defines socially disadvantaged individuals as those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities an economically disadvantaged individual is one who meets the bill's income requirements so to further explain on that they go into a little bit more detail in the proposal and say any individual identifying as black hispanic asian american native american or any combination thereof will be presumed to meet this definition any individual who does not identify as such will have to prove by a preponderance of evidence that they are socially disadvantaged so this is a little bit confusing and i've already seen conflicting information on this on the internet so remember in order to qualify for the bulk of this proposed grant money you would have to be first time home buyer a first generation home buyer and make no more than 120 of the average median income in the area that those are just the three main criteria for the 20 000. now that remaining five thousand would only be applicable to these socially and economically disadvantaged individuals who have outlined in this description right here from the act so now that we know whether you may or may not qualify for these proposed funds let's talk about how the biden administration is anticipating they will be able to be used these funds can be used for down payment assistance which is awesome that will help alleviate the big obstacle to home ownership which is saving for down payment for a lot of people in addition to that closing costs assistance can be included as well as buying down your interest rate so you can use these potential funds if you have some left over from covering that down payment and closing costs to put that towards buying down that interest rate and getting yourself a better deal for the life of your loan now the really big thing that i'm excited about is that these funds through this program can be combined with funds from other state government local non-profit private company programs so in the event that you are already using another form of down payment assistance according to this act it sounds like this these proposed funds from the government would be able to use in conjunction with other programs and that is something that i don't see very often so it is worth noting so let's talk about how to apply of course like i mentioned this is just currently a proposal so hang tight this has not been passed into law there is nothing that you can apply for or take advantage of right now now how the biden administration has planned to fully execute this if passed into law is that they will make these funds available at the time of purchase and this is something that they had talked about with their tax credit plan for 15 000 as well but according to everything that i've read it seems like this program is going to be kind of a replacement for that 15 000 tax credit that was originally proposed in addition to all of this funds are expected to be dispersed through state agencies you guys know how i feel about state agencies it's going to be one of those things where it's kind of like getting down payment assistance from someone who's working at the dmv counter this could cause issues for you if you're planning on using this because state agencies although they can provide a lot of great services are known for not always being super prompt and timely when it comes to offering assistance and just going through their processes so just take this program with a grain of salt and know that it would obviously be great to take advantage of the free money that you can get if you qualify for it but you will probably need to give yourself extra time when buying a house and sellers may be a little hesitant to accept your offer if they know you're using this if they have other offers on the table that they think could close quicker the last thing that i also want to talk about is that through this act the biden administration has clarified that this is going to be grant money so if you've seen any of my other down payment assistance videos or anything like that and grant money means that it can be forgiven so they're saying that you would have to live in the property that you buy with these funds for five years in order for this grant money that they give you to be completely forgiven and for you not to have to pay it back so although this grant for first-time home buyers differs dramatically from what a lot of us were anticipating the first time homebuyer tax credit would be it's important to realize why this is the case after decades of governmental discrimination this grant is proposed in order to help bridge some of the generational wealth gap that was caused by the government's discriminatory lending for decades prior to this the wealth building aspect of real estate largely comes from home ownership and due to the fact that many groups of people have been banned from or strongly discouraged from home ownership has become a problem so it is through these eligibility requirements that the biden administration is trying to set up a grant to specifically offer assistance to some of those people now of course this is not as open as the tax credit seemed when it was proposed so if you do not meet these eligibility requirements don't get discouraged there are tons of other down payment assistance programs closing cost programs and different all-encompassing first-time homebuyer programs out there that are available to you as you've heard me say before all of these programs and grants have specific and differing criteria so just because you do not get approved or you're not eligible for one specific one does not mean that you can't find assistance elsewhere i have made a video specifically covering different types of down payment assistance and where to find the programs available in your area so i will link that above now so you can check that one out and if you are interested in learning more about how different biden administration proposals could affect you as a first-time homebuyer make sure to check out my video on the credit score changes that this administration is trying to put into play this could have a huge effect on how your credit score is reported and could make it possibly go up or down depending on how on top of certain payments you have been i will see you in the next video

Channel: Nicole Nark

Views: 565,191

Keywords: biden 25000 first time home buyer program, biden first time home buyer program, biden tax credit, first time home buyer, first time home buyer tax credit 2021, 25000 home buyer grant, 25000 down payment assistance, biden down payment assistance, down payment toward equity, down payment toward equity act of 2021, biden first time home buyer, first time home buyer programs, real estate, arkansas realtor, nicole nark

Id: ZOIHT2fXws0

Length: 12min 42sec (762 seconds)

Published: Mon Apr 19 2021