Biden unveils sweeping plan to lower housing costs for working families

President Joe Biden has a plan to provide a $10,000 tax credit for first-time homebuyers and people who sell their starter homes.
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By Stacy M. Brown
NNPA Newswire Senior
National Correspondent

In a move to tackle the escalating housing crisis, President Joe Biden has revealed a comprehensive plan to build and preserve over 2 million new homes, coupled with strategic measures to alleviate homeownership and rental expenses.

Biden is urging Congress to enact legislation facilitating more Americans’ access to homes, acknowledging the pivotal role of homeownership in family well-being and economic prosperity. The president also advocates for a mortgage relief credit, extending an annual tax credit of $5,000 to middle-class first-time homebuyers for two years. This initiative is expected to help over 3.5 million families realize their dream of homeownership over the next two years.

To address the current scenario where homeowners are hesitant to sell due to favorable mortgage rates, the president proposes a one-year tax credit of up to $10,000 for middle-class families selling their starter homes. The move is estimated to benefit approximately 3 million families.

Biden has urged Congress to allocate up to $25,000 in down payment assistance for first-generation homebuyers, supporting an estimated 400,000 families in overcoming financial barriers to homeownership.

In addition to these legislative proposals, Biden has taken immediate action through the Department of Housing and Urban Development (HUD), reducing mortgage insurance premiums and announcing measures to lower closing costs for refinancing and home mortgages.

Biden said he’s pressing Congress to pass legislation facilitating the construction and renovation of over 2 million homes. The president also called for expanding the Low-Income Housing Tax Credit to construct or preserve 1.2 million more affordable rental units. A proposed Neighborhood Homes Tax Credit aims to build or renovate over 400,000 starter homes for homeownership.

Further, the administration has introduced a $20 billion competitive grant fund to support communities in building more housing, which would create hundreds of thousands of units, address the shortage, and lower rental and home-buying costs.

The White House also announced proposals to increase contributions from Federal Home Loan Banks to the Affordable Housing Program, doubling the annual contribution to 20 percent, which is anticipated to raise an additional $3.79 billion for affordable housing over the next decade, assisting nearly 380,000 households.

In parallel efforts to address rental affordability and stability, Biden announced steps to combat unfair practices by cracking down on corporate landlords engaging in illegal practices that inflate rents. The administration is calling on federal agencies to address anti-competitive measures contributing to rent hikes.

Biden also said he’s seeking to tackle burdensome renter fees, including misleading and hidden fees. Building on actions by the FTC and HUD, the administration said it aims to ban such fees, ensuring transparency in rental agreements.

Biden has demanded that Congress expand rental assistance to over half a million households, including low-income veterans and youth aging out of foster care, marking historic voucher guarantees.

The White House said the expansive plan underscores the Biden administration’s commitment to making homeownership and rental housing more accessible, meeting the needs of working families, and fostering a fair and stable housing market.

“President Biden believes housing costs are too high and that significant investments are needed to address the large shortage of affordable homes inherited from his predecessor, which has been growing for more than a decade,” administration officials stated in a news release.

They noted that, during his State of the Union Address, Biden called on Congressional Republicans to end years of inaction and pass legislation to lower costs by providing a $10,000 tax credit for first-time homebuyers and people who sell their starter homes, build, and renovate more than 2 million homes; and lower rental costs. Biden also announced new steps to lower home-buying and refinancing closing costs and crack down on corporate actions that rip off renters.

“We are starting to see some progress. More housing units are under construction right now than at any time in the last 50 years, rents have fallen over the last year in many places, and the homeownership rate is higher now than before the pandemic,” the White House stated. “But rent is still too high, and Americans who want to buy a home still have difficulty finding one they can afford. That is why President Biden has a landmark plan to build over 2 million homes, which will lower rents, make houses more affordable, and promote fair housing.”

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