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119-hr-10833119th CongressWALLET

Doorway to the American Dream Act

Sponsored By: Representative Thanedar, Shri [D-MI-13]

Introduced

Summary

Creates a new insured mortgage program to cut borrowing costs for lower- and middle-income first-time homebuyers. The Doorway to the American Dream Act would offer high‑LTV, capped‑rate loans with federal monthly interest subsidies for eligible borrowers who meet income and counseling rules.

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  • Families and first-time buyers: Would let households earning below 160% of area median access insured loans if they complete an approved counseling program. Interest on loans would be capped at 3.5% and loans would have terms up to 30 years.
  • Mortgage lenders: Would get monthly interest‑rate subsidies that cover the gap between the lender rate and income‑based benchmarks. Lenders would also pay an initial premium of 1% and an annual premium of 0.35% and receive legal protections like incontestability for approved mortgages.
  • High‑cost areas and green homes: Loan size limits would track area median prices and existing Federal Home Loan Mortgage Corporation caps, including a principal cap set at up to 115% of area median. The insured amount may be increased by up to 20% for added solar systems.

*This bill would increase federal spending by authorizing up to $5.0 billion in annual appropriations and by creating ongoing interest‑rate subsidy payments to mortgagees.*

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Bill Overview

Analyzed Economic Effects

1 provisions identified: 0 benefits, 0 costs, 1 mixed.

New mortgage help for first-time buyers

If enacted, HUD would create a new insured mortgage program for first-time buyers and households with income under 160% of area median income. Loans would allow up to 96.5% loan-to-value, a fully amortizing 30-year term, and a contract interest cap of 3.5% per year. HUD would pay a monthly interest subsidy so borrower rates align with income-tier benchmarks that run from 1.00% up to 3.50%. Mortgage insurance would charge a 1.0% upfront premium and a 0.35% annual premium. The principal limit would be the lesser of 115% of the area's median one-family house price or 150% of the FHLC Act limit, with a 1998-based floor. The insured amount could be increased up to 20% for qualifying solar installations. You would need HUD-approved counseling, must use the home as your primary residence (certified at least annually), and no subsidy would be paid if the property is not your primary residence. HUD would publish an approved-lender list within 180 days, and the program would have up to $5 billion in annual federal authority, adjusted for inflation.

Sponsors & CoSponsors

Sponsor

Thanedar, Shri [D-MI-13]

MI • D

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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