October 26, 2021
Hon. Nancy Pelosi
United States House of Representatives
H-232 U.S. Capitol Building
Washington, DC 20515
Hon. Chuck Schumer
United States Senate
S-230 U.S. Capitol Building
Washington, DC 20510
Dear Speaker Pelosi and Majority Leader Schumer:
As a broad coalition of civil rights, consumer, and housing advocates, we write to highlight the urgent need to include targeted first generation down payment assistance (DPA) in the Build Back Better Act.
Congress cannot miss this once-in-a-generation opportunity to expand homeownership and create racial justice and equity. Targeted DPA is one of the most cost-effective strategies to shrink disparities in wealth and narrow the homeownership gap. More than half a million Black and Latino families could become first-generation homeowners thanks to this program even if funded at $30 billion over ten years. In this case, DPA would help 288,208 Black families; 223,649 Latino; 88,000 Native American, Asian American, and Pacific Islander families; and 249,398 white families achieve homeownership.
Families that own their homes are more economically stable and have the assets to create and expand businesses, send their children to college, or build a nest egg for a secure retirement. Lack of access to home equity is the most significant driver of wealth inequality; in 2019, Latino homeowners had an average net worth 40 times higher than Latino renters. Many Black and Brown consumers have sufficient income to pay a monthly mortgage obligation, but exclusionary federal housing policies denied their families the intergenerational wealth to buy a home or gift a down payment to successive generations.
The American Dream of homeownership is drifting out of reach for low-wealth households, and this gap will increase substantially in the coming years. Among young families, about 46 percent of white households own their home, compared to just 17 percent of Black families. Because of the lack of intergenerational wealth, Black and Latino families are far less likely to receive down payment assistance from their family, delaying transitions into homeownership. As a result, more than one-third of Latinos indicated in 2020 that the biggest hurdle to buying a home was insufficient funds for a down payment.
We commend Chairwoman Waters for proposing the Downpayment Towards Equity Act, which invests $100 billion over ten years toward first-generation down payment assistance. Similarly, Senator Warnock introduced a companion bill along with Chairman Brown, and Sens. Van Hollen, Warren, Kaine, and Warner. These bills should be included in the reconciliation measure. Acting now to increase homeownership among underserved communities will strengthen the middle-class, grow the economy, and secure the safety of the future mortgage market.
While we must increase the stock of affordable homes and promote new construction, we must also empower future owner-occupiers with first-generation down payment assistance. The overwhelming majority of the funding would be spent in future years, so the program would come online in time to help these families as new homes hit the market.
If we truly intend to Build Back Better, the final bill must include equity-minded investments in targeted first generation down payment assistance. More than ever, we need your leadership to level the playing field and keep the American Dream of homeownership and wealth creation within reach for everyone.
The Leadership Conference on Civil and Human Rights
National Fair Housing Alliance
Center for Responsible Lending
NAACP Legal Defense and Educational Fund, Inc. (LDF)
National CAPACD- National Coalition for Asian Pacific American Community
National Urban League
Autistic Self Advocacy Network
National Association for the Advancement of Colored People (NAACP)
National Association for Latino Community Asset Builders
The National Coalition on Black Civic Participation
NCRC Community Development Fund
Connecticut Fair Housing Center
New Jersey Institute for Social Justice
National Action Network
Americans for Financial Reform
Center for New York City Neighborhoods
Color of Change
Long Island Housing Services, Inc.
Mountain State Justice
National Community Stabilization Trust
National Consumer Law Center (on behalf of its low-income clients)
National Housing Resource Center
New Jersey Citizen Action
Empire Justice Center