What to Know About Kamala Harris’ $25K Down Payment Assistance Program

It’s no secret that many wannabe first-time homebuyers have put their plans on hold due to a largely unaffordable housing market. In addition to rising costs of mortgages and rents as a result of low supply, the average cost of homes across the U.S. is now $412,300, according to data from the U.S. Census and Zillow. To put that into perspective, that’s up 28% from the second quarter of 2020. 

And as one of her first orders of business, Democratic presidential nominee Kamala Harris plans to address the rising costs of homeownership by giving first-time homebuyers $25,000 in down payment assistance towards their new pad. Here’s what to know about Harris’ homebuyers plan, which comes amid a historically steep housing market.

First-time homebuyers who have paid their rent on time for at least two years will be eligible for assistance, and the plan didn’t specify if there will be any minimum or maximum salary requirement. 

In the plan, Harris said she hoped that they’d be able to assist 4 million first-time buyers during her four-year term, which, according to calculations from the slightly right-leaning nonprofit policy group Committee for a Responsible Federal Budget, would cost the administration approximately $200 billion.

While Harris didn’t share more details about eligibility requirements for the $25,000 down payment assistance proposal, she also said that she’d address the lack of housing inventory by giving builders a tax credit for constructing starter homes.

In addition, her proposal suggests setting aside federal lands to be developed into residential communities and eliminating tax benefits for investors who buy single-family homes and turn them into rental properties. 

Since Harris released her plan, real estate experts and economists have expressed mixed feelings about whether this could exacerbate existing housing unaffordability as this might put a strain on the market’s already limited supply. 

Some, like Vice Senior Correspondent Eric Levitz, also expressed concerns that it could make the renting market largely unaffordable for people who still wouldn’t have the funds to buy a home with the $25,000 down payment plan. 

Still, the typical starter home — usually an affordable home that’s a good way for first-time buyers to get their foot in the door — now costs $1 million in 237 cities around the country, according to new Zillow data. It’s all pretty depressing, which is where Harris’ housing market plan comes in.

However, others praised Harris’ housing market plan for providing a plan for new construction, which may curb housing prices by adding an influx of new residential homes to the current market. In cities where construction has boomed, the cost of housing has slowly fallen, even in hot spots like Austin, Texas.

Are you buying a home or hoping to learn more about the current market? RSVP here for Apartment Therapy's free real estate webinar on Sept. 17, with insights from Egypt Sherrod, HGTV Host & CEO of Indigo Road Realty; Jose Prats, Director of Character Homes at Christie’s International; and Jason Saft, Founder of Staged To Sell Home.