American Housing and Economic Mobility Act of 2025

Overview: American Housing and Economic Mobility Act of 2025

The American Housing and Economic Mobility Act of 2025 is a multi-part housing bill that specifically supports, FHA, VA, and USDA lending. It gives first-time home buyers a 3.5% down payment grants for buying a home, expands VA mortgage eligibility to descendants of deceased veterans, and gives the USDA a surge of capital to scale up rural homeownership access.

The bill was introduced in the current Congress (119th) on March 11, 2025, in both the House of Representatives and the Senate. The bill's sponsor in the House is Rep. Emanuel Cleaver (D-MO-5). Its sponsor in the Senate is Sen. Elizabeth Warren (D-MA).

Note that only 4% of bills become law, according to FactCheck.org, and bills often change on their way to becoming law. This page will update as new details emerge.

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What is the American Housing and Economic Mobility Act of 2025?

The American Housing and Economic Mobility Act of 2025 is a 5-part housing bill that provides direct aid for homebuyers and makes investments in housing and policy reform to makes mortgages and homeownership more accessible.

The five key areas of the bill are:

1. 3.5% down payment grants to pay for down payment and closing costs, making it easier to buy your first home.
2. Expanded VA eligibility for certain descendants of deceased veterans, opening the door to affordable, zero-down mortgages.
3. Surge funding for the USDA mortgage program, so more low- and moderate-income families can use 100% mortgages.
4. Money for fixing distressed homes, paying off back taxes, and closing appraisal gaps in purchases to help protect struggling neighborhoods.
5. Public housing & fair lending reforms to give renters safer homes and borrowers a more fair shot at a mortgage.

The bill also includes broader housing provisions such as grants for local land use reform, affordable housing infrastructure funding, Community Reinvestment Act reforms, estate tax changes, and accessibility requirements.

Quick Facts: American Housing and Economic Mobility Act of 2025

Part I: Down Payment Assistance for First-Time, First-Generation Homebuyers

The centerpiece of the American Housing and Economic Mobility Act is Section 201 of the bill, which creates a down payment assistance program for first-time, first-generation homebuyers.

Eligible recipients receive a 3.5% first-time buyer cash grant capped at the smaller of:

• 3.5 percent of the home’s appraised value, or
• 3.5 percent of the FHA loan limit for your county

By linking the cap to FHA loan limits, the program is tailored for low- and moderate-income households buying modest homes.

The cap also adjusts upward in high-cost areas, allowing buyers in expensive markets to qualify for larger grants, while still preventing the program from subsidizing luxury or investment properties.

Note: the American Housing and Economic Mobility Act does not require eligible buyers to finance with an FHA mortgage. Buyers can use conventional mortgage or FHA financing, Non-QM loans and even 100% financing via a USDA or VA mortgage.

For buyers using a USDA mortgage or VA mortgage to buy a home, the bill's 3.5% down payment grant can be applied to closing costs, discount points, and other mortgage rate buydowns.

3.5% Cash Grant Limits for Selected U.S. Counties

To receive a grant under this program, you must meet three requirements:

1. Must be a first-time home buyer

A buyer must not have owned a home or co-signed on any residential mortgage within the last 36 months, including primary residences, vacation homes, and investment properties. If a buyer previously owned a home more than 36 months ago, they may still qualify as a first-time buyer under the definition of first-time home buyer.

Ownership of commercial property through a business entity does not count as homeownership for this rule.

Examples of First-Time Home Buyer Eligibility

2. Must be a first-generation home buyer

The American Housing and Economic Mobility Act defines first-generation home buyer as any person who self-attests under penalty of law that their parents or legal guardians do not currently, or did not at the time of their death, own residential property in the United States excluding heir property and chattel; and whose spouse or domestic partner has not, during the three years prior to purchase, owned a residential property in the United States, excluding heir property and chattel.

Exceptions are available for buyers who previously lived in foster or institutional care provided their spouse or partner has not owned a home in the U.S. during the 3-year lookback window -- again excluding heir property and chattel.

Examples of First-Generation Home Buyer Eligibility

3. Must earn a moderate income or lower

The American Housing and Economic Mobility Act is limited to households with modest income households. The program uses HUD’s area median income (AMI) figures, which varies by city and adjusts for household size.

• In standard cost of living areas, income must be at or below 120% of AMI to qualify
• In high-cost areas, income must be at or below 140% of AMI to qualify

There is no sliding scale. Buyers at or below the limit qualify for the full benefit. Buyers above the limit receive nothing.

Use the Homebuyer.com Income Limits calculator to see if you earn too much to qualify based on where you live.

Eligibility Based on Income

4. Must use funds for down payment and closing costs only

The down payment assistance grant may be applied toward the down payment on a home, closing costs, or a combination of the two.

Monies may not be used for home renovations, repairs, furnishings, or paying off debts that lower a debt-to-income ratio.

Grant Funds: Eligible Use Cases

5. Must complete homebuyer education

The American Housing and Economic Mobility Act builds on public research showing that home buyers who receive homeownership counseling are less likely to default.

To qualify for assistance, buyers must complete a homebuyer education program that includes one-on-one counseling with a HUD-approved housing counseling agency.

A certificate of completion is required before any funds can be released.

6. Must make the home a primary residence for 5 years

The American Housing and Economic Mobility Act requires homeowners to live in their homes as a primary residence for five years. Buyers who sell their home or change residence within 60 months must repay a portion of the grant they received.

• Sell or move within Year 1: Repay 100% of the grant
• Sell or move within Year 2: Repay 80% of the grant
• Sell or move within Year 3: Repay 60% of the grant
• Sell or move within Year 4: Repay 40% of the grant
• Sell or move within Year 5: Repay 20% of the grant
• Stay 5 years or longer: Repay 0%

The bill makes exceptions for hardship situations, such as job relocation, divorce, military deployment, or selling at a loss. In those cases, repayment may be reduced or waived.

It also makes exceptions for buyer who sell their home for not a lot of profit. The bill's language states that cash grant recipients will only have to repay their grants up to the amount of their profit — never more.

For example, if a home buyers receives a $30,000 grant and sells their home after 2 years, they'd normally repay 60%, or $18,000. If the profit on the sale was only $3,000, though, the buyer would only have to repay $3,000.

Example: Pro Rata Cash Grant Schedule (Grant = $40,000)

9. No duplication of federal aid

The American Housing and Economic Mobility Act does not allow home buyers to double-dip federal cash grants for the same home purchase, which means that buyers if buyers use the bill's 3.5% down payment grantm, they may receive the $20,000 or more cash grant from the Downpayment Toward Equity Act or the $30,000 cash grant from the Home of Your Own Act.

Other federal programs that provide tax credits to buyers or access to amended mortgage rules are allowed, subject to lender approval and program rules.

Can This Program Be Combined?

Part II: VA Loan Eligibility for Descendants of Deceased Veterans

Another key part of the American Housing and Economic Mobility Act is its expansion of the VA Home Loan program.

Under current VA mortgage guidelines, VA home loan benefits are limited to veterans, active-duty service members, certain National Guard and Reserve members, and surviving spouses.

Title II, Section 206 of the American Housing and Economic Mobility Act temporarily extends eligibility to a new group: direct descendants of certain deceased veterans.

Direct descendants, including legally adopted children, are eligible if they are first-time, first-generation home buyers and their parent:

• Served on active duty between June 22, 1944, and April 11, 1968
• Has passed away
• Did not receive a VA housing loan benefit during their lifetime

VA Eligibility Scenarios Under The American Housing and Economic Mobility Act

Expanded VA eligibility provision is meant to address racial discrimination that kept many veterans, especially Black veterans, from accessing VA home loan benefits during and after World War II and the Korean War.

Part III: $420 Million Funding Surge for USDA Mortgages

The third big benefit in the American Housing and Economic Mobility Act is a surge boost in funding for USDA mortgages.

The bill sets aside an additional $420 million in 2025 for Section 502 direct loans, which provide affordable mortgages to low- and very-low-income households. This is a 47% increase to the program's most recent annual allocation. USDA Direct loans feature lower interest rates and longer repayment terms to hold monthly costs low.

In addition, the bill increases funding for other USDA programs, including:

• Section 504 home repair loans and grants for fixing health and safety hazards
• Section 515 rental housing loans for increasing the supply of affordable rentals in rural communities
• Section 523 self-help housing grants for supporting sweat-equity home construction

USDA mortgages are available in non-urban areas natiownide -- not just the rural parts. Use the Homebuyer.com USDA Eligibility Map to look up any USPS address nationwide.

Parts IV - IX: Other Provisions To Help Housing & Home Buyers

Beyond direct grants and loans, the American Housing and Economic Mobility Act includes changes that shape housing policy and options nationwide.

It includes provisions that make it easier to rent without discrimination, increase the supply of homes, and add features that make homes safer and more usable.

Here's a review of each of the bill's remaining parts.

Who Sponsors the American Housing and Economic Mobility Act in Congress?

The American Housing and Economic Mobility Act was introduced in both chambers of Congress on March 11, 2025.

• In the House, the bill was introduced by Rep. Emanuel Cleaver (D-MO-5) with 26 original cosponsors.
• In the Senate, the bill was introduced by Sen. Elizabeth Warren (D-MA) with 8 original cosponsors.

The bill also has broad support from housing, lending, and civil rights groups. Sponsors emphasize that the Act is backed by a wide coalition — including mortgage industry associations, nonprofit housing groups, and community development organizations — all aligned around expanding homeownership opportunities.

Key Supporing Organizations