First-generation downpayment assistance program

(a) Establishment The Secretary shall carry out a program under this Act to provide grants to States and eligible entities to provide financial assistance under this section to first-generation homebuyers to assist them with acquiring owner-occupied primary residences. (b) Allocation After reserving amounts as required under sections 7(d) and 9(b), any remaining amounts made available to carry out this Act shall be allocated as follows: (1) States 75 percent of such amounts shall be allocated among States in accordance with a formula established by the Secretary, which shall— (A) take into consideration the best available data to provide more funding to States with a higher approximate number of potential qualified homebuyers; and (B) be adjusted to reflect median area home prices. (2) Eligible entities 25 percent of such amounts shall be made available only to eligible entities on a competitive basis. (c) Assistance Amounts from a grant under this Act shall be used only to provide assistance— (1) on behalf of a qualified homebuyer; and (2) for— (A) costs in connection with the acquisition, involving an eligible mortgage loan, of an eligible home, including downpayment costs, closing costs, and costs to reduce the rates of interest on eligible mortgage loans; (B) subsidies to make shared equity homes affordable to homebuyers by discounting the price for which the home will be sold and to preserve the affordability of the home for subsequent homebuyers; and (C) pre-occupancy home modifications required to accommodate qualified homebuyers or members of their household with disabilities. (d) Amount A grant of assistance under this Act— (1) may be provided on behalf of any qualified homebuyer only once; and (2) may not exceed the greater of $20,000 or 10 percent of the purchase price in the case of a qualified homebuyer, not to include assistance received under subsection (c)(2)(C) for disability related home modifications, except that the Secretary may increase such maximum limitation amounts— (A) for qualified homebuyers who are socially and economically disadvantaged; or (B) in the case of qualified homebuyers acquiring residences located in high-cost areas, as determined based on median home prices or prices of residences under a shared equity homeownership program. (e) Layering of assistance Assistance from grant amounts under this Act may be provided on behalf of a qualified homebuyer who is receiving assistance from other sources, including other State, Federal, local, private, public, and nonprofit sources, for acquisition of an eligible home. (f) State administration (1) In General The Secretary shall require that each State receiving grant amounts under this Act administer the program to provide assistance with such amounts through the State housing finance agency for the State or such other housing agency of the State as the Secretary finds appropriate, except that any such agency may, at the option of the agency, contract with a nonprofit entity, including a housing counseling agency approved by the Secretary, to administer such assistance. (2) Affirmatively furthering fair housing For a State to be eligible for a grant under this Act, the State shall be in compliance with the Secretary’s regulations implementing the requirement to affirmatively further fair housing. (3) Prohibition of priority or recoupment of funds In selecting qualified homebuyers for assistance with grant amounts under this Act, a State or eligible entity may not— (A) provide any priority or preference for homebuyers who are acquiring eligible homes with a mortgage loan made, insured, guaranteed, or otherwise assisted by the State housing finance agency for the State, any other housing agency of the State, or an eligible entity when applicable; or (B) seek to recoup any funds associated with the provision of downpayment assistance to the qualified homebuyer, whether through premium pricing or otherwise, except as provided in subsection (g) or otherwise authorized by the Secretary. (g) Recapture and reallocation The Secretary shall require changes in a grantee’s policy or distribution of funds or recapture any amounts remaining available to a grantee, and reallocate such funds among other States and eligible entities, if the Secretary determines in his or her sole discretion that— (1) a State or eligible entity— (A) has not demonstrated the capacity to expend grant funds in a timely manner that furthers the purposes under this Act; or (B) is distributing or plans to distribute grant funds in a manner that results or will predictably result in qualified homebuyers from racial or ethnic groups that have faced historic obstacles to homeownership failing to receive the benefits of such funds in proportion to their population among qualified homebuyers in the relevant area; or (2) there is insufficient demand among qualified eligible entities to distribute funds. (h) Uniformity and program standardization The Secretary shall establish a uniform set of requirements to which each State and eligible entity receiving grant amounts under this Act shall comply.