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:

1. The Low-Income First-Time Homebuyers (LIFT) Act
2. The LIFT Act of 2023

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 7/18/2025, the LIFT Act has not been introduced as a bill in the 119th Congress (2024-2025).

What is the LIFT Act?

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.

How Does the LIFT Act Work?

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.

HUD and the U.S. Treasury form a partnership to reduce mortgage rates

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.

20-year mortgage rates are reduced

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:

• FHA Loan: 30 years at 6.500% with 0.55% annual MIP = $1,000 per month
• LIFT Act Loan: 20 years at 5.125% with no annual MIP = $1,000 per month

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.

The program self-funds via upfront mortgage insurance premiums

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.

Who Qualifies for the LIFT Act?

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.

Must be a first-time home buyer

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.

Must be a first-generation 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.

Must buy a 1-unit home

The LIFT Act is for single-unit homes only. Eligible home types include:

• Single-family detached homes
• Single-family attached homes
• Townhomes
• Condominiums

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.

Must earn a low- or moderate income for your area

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 $159,180 annually or less to use the LIFT Act wealth-building mortgage.

Must be FHA mortgage-eligible

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:

1. Credit score of 580 or higher with 3.5% down payment
2. Credit score of 500-579 with 10% down payment
3. Debt-to-income ratio of 43% or less
4. Steady employment history for at least 2 years
5. Valid Social Security number and legal residence in the U.S.

Note: your mortgage lender may impose additional qualifying criteria, known as lender overlays. Be sure to ask about your eligibility.

What Is The LIFT Act's Current Status?

As of 7/18/2025, 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:

• September 22, 2021: S. 2797 introduced as LIFT Homebuyers Act of 2021 with 4 co-sponsors
• July 12, 2023: H.R. 5473 introduced as The LIFT Act of 2023 with 6 co-sponsors
• July 13, 2023: S. 2295 introduced as The LIFT Act of 2023 with 4 co-sponsors

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.

Frequently Asked Questions about the LIFT Act

I already bought a home. Can I use the LIFT Act?

The LIFT Act works by changing mortgage terms and interest rates. Therefore, it can't be applied to a mortgage already in process.

Can I refinance my mortgage using the LIFT Act?

No, the LIFT Act is for purchase mortgages only. Homeowners cannot use the LIFT Act to refinance an existing mortgage.

Do I have to use an FHA mortgage with the LIFT Act?

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.

My spouse is a former homeowner. I am not. Can I use the LIFT Act if my spouse is not on the mortgage application?

The language of the LIFT Act bill states that both the home buyer and their spouse must meet the first-time home buyer guidelines.

My sibling is a homeowner. They are co-signing on my mortgage but not living with me. Can I use the LIFT Act?

The LIFT Act language states that co-borrowers are not considered for first-time home buyer status unless they also live in the home.