Oregon’s U.S. senators have put forward a federal proposal that could give first-time homebuyers as much as $50,000 toward a down payment if they save $10,000 of their own money. Sen. Jeff Merkley introduced the Homeownership Promise Act on Wednesday, September 23, with Sen. Ron Wyden as a cosponsor. The measure is proposed legislation, and its benefits are not available to buyers.
Under the bill, a qualifying buyer would receive $5 in federal matching funds for each $1 personally contributed to a Homeownership Promise Account. The federal share would stop at $50,000, bringing the combined total to $60,000 for someone who saved the full $10,000. An employer or nonprofit organization could also contribute toward the account’s $10,000 private-contribution limit, but those contributions would not generate the federal match. Only money contributed personally by the buyer would do so.
The proposal is aimed at people who have never owned a principal residence. Buyers would have to be at least 18 years old and complete a housing counseling program approved by the U.S. Department of Housing and Urban Development. An eligible household could include one or two qualifying first-time buyers.
The money would be used at closing to purchase a primary home. The home’s price could not exceed the median single-family purchase price for its area, subject to adjustments determined by HUD. That limit would make local housing prices relevant to buyers throughout Oregon: a qualifying property in Southern Oregon would be assessed against the applicable area price standard, rather than a single statewide price.
Buyers would open the proposed accounts through participating community development financial institutions. They could withdraw their own contributions in an emergency. Federal matching funds, however, would be tied to an eligible home purchase.
For households in Josephine and Jackson counties, the plan could address one obstacle that can persist even when a buyer has enough income to make monthly mortgage payments: accumulating the cash needed to purchase a home. A buyer saving $200 a month, for example, would contribute $2,400 in a year. At the bill’s proposed matching rate, that amount would qualify for $12,000 in federal funds, subject to the program’s limits and requirements. The bill does not guarantee that such savings would be enough to buy a home or qualify for a mortgage.
Several practical details remain unresolved. The proposal does not identify which institutions in Oregon would offer the accounts, establish local purchase-price limits or set a date when buyers could begin participating. It authorizes federal funding without specifying an overall program budget. Congress would have to enact and fund the measure before HUD could put it into operation.
Oregon already has separate homebuyer assistance programs. Oregon Housing and Community Services supports down payment programs for eligible first-time and first-generation buyers with incomes at or below 100% of their area median income. Depending on the program, assistance can reach $60,000 or 20% of the purchase price, whichever is less. Applicants must complete homebuyer education and meet with a certified housing counselor. Availability and other requirements vary by participating organization.
Those state programs offer a current avenue for Oregonians seeking help with a purchase. Merkley’s proposed federal match would be a new program with its own rules. Whether a future buyer could use both for the same purchase has not been established.
For now, the Homeownership Promise Act gives prospective buyers a picture of what Congress is considering: a substantial federal match tied to personal savings, counseling and the purchase of a moderately priced primary home. Its effect in Oregon, including Southern Oregon’s housing markets, depends first on whether the proposal becomes law.