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This website discusses mortgage programs and how to qualify. Your eligibility may vary based on lender guidelines and investor overlays. Check with your lender for specific details.
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This article was checked for accuracy as of January 23, 2025. Learn more about our commitments to accuracy and your mortgage education in our editorial guidelines.
Updated: January 23, 2025
This article provides information about The Low-Income First-Time Homebuyers (LIFT) Act, a proposed bill that has not yet been passed into law. Please note that details are subject to change as the legislative process continues.
The Low-Income First-Time Homebuyers (LIFT) Act is a bill that modifies payments on 30-year mortgages to make them pay off in 20 years for the same monthly payment.
The bill is known by two names officially:
The bill for first-time home buyers was initially introduced in the 117th Congress (2021-2022) and then again in the 118th Congress (2023-2024). It failed to pass into law during either congressional session. According to FactCheck.org, only 4% of bills ever become law.
The LIFT Act is a “wealth-building home loan”, according to the bill. It aims “to establish a program to provide low- and moderate-income first-time, first-generation homebuyers with access to affordable and sustainable wealth-building home loans.”
It’s one of multiple first-time home buyer programs recently discussed in Congress. As of February 24, 2025, the LIFT Act has not been introduced as a bill in the 119th Congress (2024-2025).
The LIFT Act is a mortgage program that lowers mortgage rates, removes annual mortgage insurance premiums, and shortens an FHA loan term from 30 years to twenty years for low- and moderate-income Americans with no change to their monthly mortgage payment.
The structure of the LIFT Act mortgage builds home equity for homeowners faster, which generates more household wealth and protects home buyers from foreclosure.
The LIFT Act is a different take on the traditional first-time home buyer housing bill.
It’s not a cash grant program like the $25,000 Downpayment Toward Equity bill, nor is a tax credit like the $15,000 DASH Act or the First-Time Home Buyer Tax Credit.
The LIFT Act is a mortgage loan; the first congressional program that would accelerate mortgage payoffs for eligible participants. The bill changes the balance of principal and interest in each monthly mortgage payment so homeowners get to free-and-clear faster.
LIFT Act mortgages generate wealth at twice the rate of a typical mortgage loan.
Check your eligibility and begin your application now.
The LIFT Act legislation modifies FHA mortgages to make them pay off faster. The bill’s most recent language explains how the LIFT Act works.
The LIFT Act creates a union between the U.S. Treasury and the Department of Housing & Urban Development (HUD), which is the parent of the FHA.
In the partnership, the Treasury’s role is to purchase FHA-backed mortgages from mortgage lenders at below-market interest rates. HUD’s role is to establish rules and rates for the first-time buyer program.
The LIFT Act authorizes below-market interest rates for FHA loans to make a 20-year LIFT Act mortgage have the same payment as a 30-year FHA mortgage.
For example, here is a hypothetical $150,000 FHA mortgage that shows how the LIFT Act would work:
The bill adjusts mortgage rates on 20-year LIFT Act loans so its monthly P+I is no more than 10 percent above the 30-year mortgage counterpart.
At today’s FHA mortgage insurance premium cost, LIFT Act interest rates may be as many as 2 percentage points below standard FHA mortgage rates.
LIFT Act mortgages are self-insured and do require taxpayer money.
LIFT Act loans collect mortgage insurance premiums at closing like all FHA-backed loans. However, unlike standard FHA loans, the upfront mortgage insurance premium is the only MIP eligible buyers will pay.
There is no annual MIP with a LIFT Act mortgage.
At closing, the FHA finances an upfront mortgage insurance premium of four percent and adds it to the loan size. Mortgage insurance payments are not required again throughout the life of the loan.
The LIFT Act has not been introduced in the current 119th Congress (2024-2025), so when we discuss LIFT Act eligibility requirements, we are using the last known version of the bill from the last congressional session.
The bill’s language is not final and may change before its passage into law.
Home buyers must be purchasing their first home ever or have not owned a home in the last 36 months. If two or more people are co-applicants on the mortgage, every home buyer who will make their home their primary residence must be a first-time home buyer.
Eligible home buyers’ parents or legal guardians may not have owned a home during the 36 months before purchase. For buyers whose parents or guardians are no longer alive, the bill requires that parents and guardians did not own a home at their time of passing.
The parental / guardian requirements are waived for buyers who previously lived in foster care.
Home buyers living with a spouse or domestic partner who owned their primary residence within the last three years do not qualify as first-generation home buyers, whether the spouse or domestic partner is a co-borrower on the mortgage.
The LIFT Act is for single-unit homes only. Eligible home types include:
Manufactured and mobile homes may be eligible if the home is on a permanent foundation, is taxed as real estate, and built after June 15, 1976, among other FHA mortgage requirements.
Co-operative homes and 2-4 unit residential properties are ineligible.
Eligible home buyers must earn an income that’s at most 20 percent over the median income for their metropolitan area. For example, in Coral Gables, Florida, where the Census Bureau shows that the median household income is $130,803,, first-time home buyers must earn $156,964, per year or less to be LIFT Act-eligible.
The program makes income exceptions in high-cost areas, such as San Francisco, Denver, and other cities where the cost of living is high.
In high-cost areas, eligible home buyers must earn an income at most 40 percent above the area median income. In Orange County, California, the Census Bureau shows a 2023 area median household income near $113,700. Therefore, home buyers must earn $159,180000 annually or less to use the LIFT Act wealth-building mortgage.
The LIFT Act is based on FHA financing, so eligible first-time buyers must qualify for an FHA loan with their lender.
The minimum approval standards for an FHA mortgage include the following:
Note: your mortgage lender may impose additional qualifying criteria, known as lender overlays. Be sure to ask about your eligibility.
As of February 24, 2025, the Low-Income First-Time Homebuyer (LIFT) Act is not yet introduced in the 119th Congress (2024-2025).
The LIFT Act timeline is as follows:
In the prior two congressional sessions – the 117th (2021-2022) and the 118th (2023-2024), Sen. Mark Warner authored the current and former versions of The LIFT Act in the Senate version of the bill, and Rep. Emanuel Cleaver, II, wrote the bill’s current version in the House of Representatives version of the bill.
Both legislators are still serving Congress, so the bill may be introduced again.
The LIFT Act works by changing mortgage terms and interest rates. Therefore, it can’t be applied to a mortgage already in process.
No, the LIFT Act is for purchase mortgages only. Homeowners cannot use the LIFT Act to refinance an existing mortgage.
Yes, the LIFT Act is for FHA mortgages only. The bill language modifies how FHA loans are treated and does not mention other government-backed mortgages, including conventional, USDA, and VA mortgages.
The language of the LIFT Act bill states that both the home buyer and their spouse must meet the first-time home buyer guidelines.
The LIFT Act language states that co-borrowers are not considered for first-time home buyer status unless they also live in the home.
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