Down payment assistance part of $3.5T infrastructure plan

Senate Democrats this week unveiled a $3.5 trillion social infrastructure framework which would include down payment assistance, but little else to address challenges low-income and minority borrowers face in the housing market.

The framework would set aside $332 billion for affordable housing. Senate Democrats hope to pass the legislation through an abbreviated budgetary process known as reconciliation, in tandem with the $1.2 trillion bipartisan infrastructure package, which passed the Senate on Tuesday. Biden has said he will only sign the bipartisan effort if the $3.5 trillion package, which includes much of his agenda, also passes.

But so far, the proposal contains few ambitious new programs to tackle problems in the housing market. Besides down payment assistance, there’s no proposal to close the racial homeownership gap. Nothing in the proposal would salvage the country’s aging housing stock, or train a fleet of buildings tradespeople to retrofit inefficient homes. There’s no program make low-dollar mortgages make sense for those who finance them, and no funding to create a homeownership voucher.

Most programs in the $3.5 trillion framework are geared toward renters, not homeowners. The biggest exception is down payment assistance, which President Joe Biden campaigned on, and which housing affordability proponents have argued would help more access homeownership.

The Senate’s version is light on details, but a legislative proposal already exists in the House of Representatives. In July, California Congresswoman Maxine Waters, who chairs the House Financial Services Committee, proposed a $100 billion down payment assistance bill to provide up to $25,000 to first-time homebuyers.