The Downpayment Toward Equity Act of 2025 establishes a $100 billion federal grant program designed to help first-generation homebuyers (those whose parents never owned a home) purchase their first homes and narrow the racial homeownership gap. Eligible buyers earning up to 120% of area median income can receive grants of up to $20,000 or 10% of the purchase price through state housing agencies and nonprofit organizations, with funds usable for downpayments, closing costs, interest rate reductions, or disability-related home modifications on primary residences with one to four units. The program requires mandatory pre-purchase housing counseling and includes a repayment provision that prorates assistance if the buyer sells within five years, though no repayment is required after five years of occupancy. The legislation dedicates at least 5% of funds to counseling services and up to 1% for capacity-building support, while requiring annual congressional reports on recipient demographics and outcomes by location to track program effectiveness.
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