The Downpayment Toward Equity Act of 2025 creates a federal grant program through the Department of Housing and Urban Development to help first-generation homebuyers—those whose parents never owned a home or who were in foster care—purchase their first home and narrow the racial homeownership gap. Eligible buyers must have household incomes up to 120% of area median income and can receive grants of up to $20,000 or 10% of their purchase price, with higher amounts available for disadvantaged buyers in high-cost areas. The program distributes 75% of funds to states and 25% to other eligible entities, requires homebuyers to complete housing counseling before purchase, and allows repayment obligations to be waived after five years of occupancy. The bill authorizes $100 billion in federal spending and mandates annual reporting on applicant demographics and assistance distribution to ensure equitable outcomes across different communities.
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