# Understanding the LIFT Homebuyers Act of 2023

This bill creates a new federal program designed to help low- and moderate-income first-time homebuyers purchase their first home. Specifically, it targets people whose parents didn't own homes—what the bill calls "first-generation homebuyers"—recognizing that many families lack the generational wealth that typically helps people buy homes.

The program works by making mortgage loans cheaper and more accessible through government backing. When eligible buyers get a loan through the Federal Housing Administration (FHA) or the Rural Housing Service (for rural areas), the government helps by purchasing the mortgage-backed securities that banks create from these loans. This means banks have an easier time lending money because they can quickly sell off the loans they originate. The result is that eligible homebuyers get better interest rates and lower upfront costs. The bill caps mortgage insurance premiums at 4 percent of the loan amount instead of higher rates, and it allows loans to be structured over 20 years or longer, which keeps monthly payments more manageable.

To qualify, you need to be a first-time homebuyer with a household income at or below 120 percent of your area's median income (or up to 140 percent if you're buying in a high-cost area). You also must be a first-generation homebuyer, meaning your parents or guardians don't currently own a home, or if they've passed away, didn't own one when they died. The bill includes special provisions for people who experienced foster care or institutional care. The program runs through the end of 2025, so it's a temporary initiative to test whether this approach helps more families build wealth through homeownership.

LIFT Homebuyers Act of 2023

Cleaver, Emanuel

Low-Income First-Time Homebuyers Act of 2023 or the LIFT Homebuyers Act of 2023 This bill establishes a program to provide fixed-rate 20-year mortgages for first-time, first-generation homebuyers whose incomes do not exceed a certain amount. These mortgages must be offered by the Federal Housing Administration (FHA) or the Rural Housing Service (RHS). Pricing terms must be established (1) such that monthly mortgage payments under this program are similar to a 30-year FHA- or RHS-backed mortgage, or (2) as are determined to be necessary to develop liquidity for securities backed by covered mortgage loans and expand program participation by eligible homebuyers. Additionally, program funds must be transferred to the Department of the Treasury for the purchase of securities backed by such mortgages.