New Homeownership Act Funds $30,000 Grants for First-Time Buyers, Mandates Financial Counseling

The new Home of Your Own Act of 2025 is setting up a massive federal grant program designed to inject serious cash into the housing market for first-time buyers. Starting in fiscal year 2026 and running through 2030, this Act authorizes $6.7 billion annually for states and Indian tribes to hand out grants of up to $30,000 per eligible person to cover down payments, closing costs, and even necessary repairs before move-in (Sec. 2).

This isn't a loan you pay back with interest; it’s a direct grant designed to help people jump the biggest hurdle in buying a home: the upfront cash. The assistance is explicitly not counted as taxable income for federal tax purposes, which is a huge win for recipients who won't get hit with a surprise tax bill the following April (Sec. 2).

Who Gets the Keys to the Cash?

This money is primarily aimed at first-time homebuyers whose household income is at or below 120 percent of the local median income (Sec. 6). Think of this as a targeted effort to help people who earn too much to qualify for some traditional low-income assistance but are still locked out of the market because they can't save up the five-figure down payment needed today. If you live in a high-cost area, that income cap jumps up to 150 percent of the local median income, acknowledging that a teacher or nurse in San Francisco needs more help than one in Omaha.

To ensure this money is used responsibly, there’s a required step: mandatory homeownership financial counseling (Sec. 4). Before receiving a dime, the applicant must complete a program approved by the state, tribe, or HUD. This is the bill’s way of making sure that when you get the keys, you know exactly what you’re signing up for—from property taxes to maintenance costs.

The Five-Year Catch: The Residency Rule

While the grant is great, it comes with a major condition designed to prevent people from using the funds to quickly flip houses. If you receive the grant, you must live in that home as your primary residence for 60 months (five years) (Sec. 2). If you move out before that five-year mark, you generally have to pay back the portion of the grant corresponding to the time you didn't live there.

This repayment requirement is serious, and the state or tribe is allowed to put a lien (a legal claim) on the house to ensure they get the money back. However, the bill does include a couple of crucial safety valves. You won't have to pay it back if you face a hardship (which the Secretary of HUD gets to define) or if you sell the house to a legitimate buyer and the sale price is less than what you originally paid for the house (including closing costs) (Sec. 2). This prevents the grant from becoming a crushing debt if life throws you a curveball, though the broad authority given to the Secretary to define “hardship” is something to watch.

How the Money Gets Distributed

The funding won't just flow directly from Washington to individuals. It goes to states and Indian tribes, who then run the program. The bill sets aside 3% of the total funds specifically for Indian tribes, who also get flexibility to prioritize their own members in distribution (Sec. 2, Sec. 3).

For states, there's a requirement aimed at boosting local economic development: they must distribute at least 25 percent of their funds through Community Development Financial Institutions (CDFIs) (Sec. 3). CDFIs are local, mission-driven financial organizations that often focus on underserved communities. This provision ensures that a significant chunk of the money is handled by institutions already rooted in community development, rather than just large national banks. This is a smart move to make sure the money reaches the people it’s intended for, but it also means states will need to quickly partner up with these local institutions to meet the requirement.