Presumptive Democratic presidential candidate Vice President Kamala Harris will propose giving first-generation homebuyers up to $25,000 for a down payment.
First-generation homebuyers are those whose parents don’t own a home.
First-time homebuyers could get a $10,000 tax credit.
In a preview statement obtained by ABC News, the campaign says, “Many Americans work hard at their jobs, save, and pay their rent on time month after month. But they can’t save enough after paying their rent and other bills to save for a down payment — denying them a shot at owning a home and building wealth. As the Harris-Walz plan starts to expand the supply of entry-level homes, they will, during their first term, provide working families who have paid their rent on time for two years and are buying their first home up to $25,000 in down-payment assistance, with more generous support for first-generation homeowners.””The Biden-Harris administration proposed providing $25,000 in downpayment assistance for 400,000 first-generation home buyers — or homebuyers whose parents don’t own a home — and a $10,000 tax credit for first-time home buyers. This plan will significantly simplify and expand the reach of down-payment assistance, allowing over 1 million first time-buyers per year – including first-generation home buyers – to get the funds they need to buy a house when they are ready to buy it,” the campaign said.
Do you know those shows that gift awesome houses to families? Some end up moving out because nothing is free. You still have to pay property taxes, utility bills, and maintenance.
If Harris gets her way, it’ll be 2008 all over again.
This move raises prices and makes them feel they can afford any home.
It leads to risky lending practices.
Risky lending practices caused the subprime mortgage crisis in 2008. This meant companies like Fannie Mae and Freddie Mac, two government-sponsored mortgage lenders, made it easier for people with low credit scores or a high risk of default to get a home loan.
It all started in 1999 by, yes, the government:
Subprime mortgages are mortgages made to borrowers with less-than-perfect credit and less-than-adequate savings. An increase in subprime borrowing began in 1999 as the U.S. government-sponsored mortgage lender Federal National Mortgage Association (widely referred to as Fannie Mae) began a concerted effort to make home loans more accessible to those with lower credit and savings than lenders typically required.The idea was to help everyone attain the American dream of homeownership. Since these borrowers were considered high risk, their mortgages had unconventional terms that reflected that risk, such as higher interest rates and variable payments. While many saw great prosperity as the subprime market began to explode, others began to see red flags and potential danger for the economy.Robert R. Prechter Jr., the founder of Elliott Wave International, consistently argued that the out-of-control mortgage market was a threat to the U.S. economy because the whole industry was dependent on ever-increasing property values.
By 2002, Fannie Mae and Freddie Mac “extended more than $3 trillion worth of mortgage credit.”
The lenders would “repurchase mortgages from the lenders who originated them and make money when mortgage notes are paid.”
Guess what happened next? “Thus, ever-increasing mortgage default rates led to a crippling decrease in revenue for these two companies.”
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