First-Time Homebuyer 3% Mortgage Bill (2027). Clear standards, transparent steps, and quick enforcement with public results.
This bill sets clear standards. It reduces gamesmanship. It gives the public a fair, timely, and enforceable process.
No. Urgent safety work and court ordered compliance continue with narrow and renewable certifications.
No. The approach is simple. It uses short certifications and public notice backed by independent checks.
No. The focus is on standards, fairness, and better execution. Any costs are covered by savings and recovery of waste.
Section 1. Short Title “This Bill may be cited as the First-Time Homebuyer 3% Mortgage Bill (2027).” Section 2. Findings First-time homeownership rates are at historic lows, with only 24% of recent home purchases made by first-time buyers. Explanation: Young Americans are being priced out. Without intervention, homeownership becomes a privilege of the wealthy, widening inequality. Rising interest rates averaging above 6.5% and median home prices exceeding $425,000 nationally have made housing unaffordable for many. Explanation: Even middle-class households can’t qualify or afford payments. This locks out millions of would-be homeowners. Homeownership is a primary means of wealth building for American families and strengthens communities. Explanation: Owning a home helps families build equity, stay rooted, and pass on generational wealth. Renters miss that opportunity. A federally backed three percent mortgage will lower costs for first-time buyers while requiring safeguards to prevent housing inflation. Explanation: Lowering interest makes monthly payments affordable, but price caps and oversight prevent sellers from simply raising prices. The program must be implemented in a fiscally responsible manner without raising taxes. Explanation: The program is designed to be budget-neutral, paid for with fees, reallocations, and existing funds-not new taxes. Section 3. Definitions First-time homebuyer means someone who hasn’t owned a primary residence in the past 3 years. Explanation: Prevents repeat buyers from gaming the system and ensures the benefit goes to true first-timers. Eligible home means a primary residence (single-family, condo, co-op, or small multi-family where borrower lives in one unit). Explanation: Keeps focus on stable, owner-occupied housing rather than vacation homes or rentals. Maximum Purchase Price Cap means the ceiling on home prices eligible for the program. Explanation: Stops subsidies from being used to buy luxury homes and keeps focus on starter homes. Section 4. Establishment of Program HUD shall establish the First-Time Homebuyer 3% Mortgage Program. Explanation: A clear federal framework ensures uniformity across lenders and regions. Loans must: (1) carry a fixed 3% rate, (2) last no more than 30 years, (3) be used only for eligible homes, and (4) meet HUD underwriting standards. Explanation: Protects buyers from predatory terms, ensures affordability, and prevents program abuse. Loans guaranteed by the federal government, backed by full faith and credit. Explanation: Gives lenders confidence to participate widely while shielding buyers from market rate shocks. Borrowers must complete HUD-approved homebuyer counseling. Explanation: Reduces foreclosure risk by educating buyers about mortgages, budgeting, and responsibilities. Section 5. Purchase Price Limits Baseline cap equals national median home price. Explanation: Keeps the program tied to what’s affordable for an average buyer. Adjusted caps: up to 150% of median in high-cost areas; not less than 80% in low-cost areas. Explanation: Allows access in expensive cities like San Francisco or New York without over-subsidizing luxury homes. Caps updated annually by HUD. Explanation: Prevents the cap from becoming outdated as housing markets shift. Section 6. Funding and Fiscal Responsibility No new taxes. Explanation: Keeps the promise that working Americans won’t face higher costs. Costs covered by: (1) borrower interest and guarantee fees, (2) reallocation of housing funds, (3) reduced subsidies for luxury/high-income borrowers. Explanation: Shifts resources from wealthy borrowers who don’t need subsidies to first-time buyers who do. Federal Reserve, Ginnie Mae, Fannie Mae, and Freddie Mac authorized to provide liquidity. Explanation: Ensures a healthy secondary market so lenders keep issuing 3% mortgages without drying up capital. Program must remain budget-neutral. Fees adjusted as needed to offset costs. Explanation: Prevents this from becoming an endless drain on federal budgets. Section 7. Oversight HUD must monitor performance: loan volume, default rates, and housing price impacts. Explanation: Ensures program goals are met without fueling inflation. HUD Inspector General audits annually; Government Accountability Office reports at 2 and 5 years. Explanation: Creates independent watchdogs to prevent waste or abuse. Annual reports to Congress on utilization, fiscal impact, and market effects. Explanation: Keeps lawmakers and the public informed, allowing mid-course corrections. Section 8. Sunset Program authority ends after 10 years. Explanation: Forces Congress to re-evaluate, ensuring the program works before it becomes permanent. Existing loans remain valid and federally backed. Explanation: Protects borrowers from sudden loss of support mid-mortgage. Section 9. Effective Date Takes effect 180 days after enactment. Explanation: Gives HUD time to set up infrastructure and rules before launch. Policy Memo Rationale This bill directly tackles America’s first-time homebuyer crisis by lowering mortgage rates for new buyers, without raising taxes or subsidizing luxury homes. It balances affordability with fiscal discipline and oversight. Estimated Impact Makes homeownership achievable for millions priced out by high rates. Expands middle-class wealth-building and stabilizes communities. Adds safeguards to prevent fueling price bubbles. Feasibility Builds on FHA, VA, and USDA loan precedents. Uses existing federal housing infrastructure. Designed to be budget-neutral with no new taxes. Back to All Bills