CU League, Others Support Bill Addressing Housing Affordability Crisis

The cost of owning a home reached a record high in April as the median price of a home hit $383,725 and the median monthly payment jumped to $2,843, according to a report released by the real estate company Redfin. For comparison, the median home price in 2014 was $275,200.

With prices rising and interest rates holding at higher levels, there’s a growing population who simply cannot afford what it takes to own a home. Rep. Teresa Leger Fernández (D-N.M.) introduced legislation Wednesday that could be a potential solution to the housing affordability crisis.

The Home of Your Own Act authored by Rep. Leger Fernández, and cosponsored by nine other Democrats, would provide one-time, $30,000 homeownership assistance grants to eligible first-time homebuyers who earn at or below 120-150% of the area median income.

Rep. Leger Fernández said, “We need a new homeownership assistance program so our teachers, nurses and artists can afford to live and stay in their hometowns. This program is going to help people when they need it most. Tax credits help on April 15th but people need money for when they’re closing on their home — that’s what my bill will accomplish.”

According to the bill, the grant program would be run through the U.S. Department of Housing and Urban Development at a cost of $33.5 billion over five years with $6.7 billion authorized per year.

Credit union officials have come out in support of this legislation.

The president/CEO of the Credit Union Association of New Mexico, Melia Heimbuck, said, “Prioritizing legislation that aims to address the housing affordability crisis will certainly benefit those in the Land of Enchantment. We endorse this legislation and look forward to its advancement to help families achieve homeownership.”

America’s Credit Unions President/CEO Jim Nussle added, “America’s Credit Unions is proud to endorse this legislation in partnership with the Credit Union Association of New Mexico. Too many families across the country are facing barriers to achieve the American dream of homeownership due to high mortgage interest rates and rising closing costs. We greatly appreciate Rep. Leger Fernandez for introducing The Home of Your Own Act, which aims to fix this growing problem. CDFI certified credit unions stand ready to support the mission of affordable home ownership in addition to providing much-needed community assistance to consumers who are underserved, have a modest income, or are living in distressed communities. We look forward to working with Rep. Fernandez to advance this legislation.”

Other details of the legislation include the following:

• Provides flexible financial assistance to homebuyers that can be used for down payment costs, closing costs, mortgage interest rate reduction, and/or necessary repairs prior to move-in.
• Streamlines assistance to underserved communities by empowering community development financial institutions to partner with states to administer at least 25% of the funds to homebuyers.
• Prepares participants for homeownership by requiring participants to complete a homeownership financial counseling program prior to receiving financial assistance.
• Dedicates homeownership grant funds to all 50 states, U.S. Territories (American Samoa, Guam, Northern Mariana Islands, Puerto Rico and the United States Virgin Islands), and the District of Columbia.
• Sets aside 3% of the authorized funding as homeownership grant funds for Tribal entities.