Kamala's Housing Plan

As part of her plan to revitalize economic opportunity for the middle class, Vice President Kamala Harris recently unveiled a proposal to support first-time homebuyers through down payment assistance. With housing shortages across the country and interest rates remaining high, the dream of homeownership is slipping out of reach for many. This initiative aims to address those challenges by making homeownership more affordable.

While specific details of the plan are still limited, what we know so far could be transformative for first-time homebuyers. Eligible buyers could receive up to $25K in down payment assistance, provided they meet the following criteria:

• First-time homebuyer: The program targets those purchasing their first home.

• On-time rent payments: Applicants must have made on-time rent payments for the past two years.

Additional details remain unclear, but it’s likely there would be some income qualifications and potentially extra benefits for first-generation homebuyers.

For those who qualify, the impact could be substantial. Consider the example of a $300,000 home—roughly the average price for a first-time homebuyer—where the buyer is making a 10% down payment. After accounting for down payment, closing costs, and realtor fees, this $25,000 assistance could nearly cut the buyer’s upfront cash requirements in half! This would be a huge unlock for these first-time home buyers who are often cash constrained. 

If a buyer chooses to self-represent and forgo realtor fees (try using Shay!), the savings could be even more significant. To help potential buyers gauge their eligibility and savings, we've created a calculator that breaks down the numbers.

Of course, with any new policy, it’s important to consider broader implications, many of which remain uncertain:

• Will this policy drive up home prices by injecting more stimulus into the market?

• How much additional debt will this add to the federal budget? Are we prepared for that at a time of record-high debt?

• Could these funds be better spent elsewhere—on renters, or perhaps building more affordable housing?

Even with a full understanding of the policy, these questions are challenging to answer. However, they are worth considering alongside the potential benefits as we approach November 5.