Democratic senators propose 20-year mortgages for first-time low-income home buyers
A group of Democratic Senators has a 20 year old mortgage Program to help low income Homebuyers build equity in their homes that is twice that of a traditional 30 year mortgage.
The Low-Income First Time Homebuyers Act (LIFT) introduces a Department of Housing and Urban Development program to fund low-cost, fixed-rate 20-year mortgages for first-generation home buyers who earn 120% or less of their median income a Press release.
Through Ginnie Mae, the Treasury Department would subsidize the interest rate and issuance fees related to the LIFT mortgages to match monthly payments with 30-year FHA-insured loans, effectively allowing participants to own home equity at double a traditional interest rate build up mortgage.
Under the program, the Treasury Department would facilitate the LIFT loans through the purchase of Ginnie Mae Mortgage Backed Securities backed by the loans at a premium. The purchase awards would compensate the lenders for lending.
According to the press release, in addition to targeted down payment assistance, LIFT would help policymakers close the racist wealth gap and expand the wealth-building benefits of home ownership in disadvantaged communities.
The LIFT Act is supported by Senators Mark Warner and Tim Kaine from Virginia, Chris Van Hollen from Maryland, and Raphael Warnock and Jon Ossoff from Georgia.