MReport January 2021

TheMReport — News and strategies for the evolving mortgage marketplace.

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56 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST GOVERNMENT Helping Homebuyers Biden's 5 policies could have a positive impact on first-time homebuyers. T he current housing market can be very difficult and daunting to first-time buyers. Low inventory and expedited sales can make the decision-making process especially scary for those without a mortgage and general home shopping experience. Realtor. com lists five ways that the Biden presidency can assist first-time buyers. There have been mentions of a $15,000 down payment tax credit, for starters. This can alleviate much of the pressure of a down payment. In fact, this amount could cover 4.3% of a median- priced home, which currently sits at $348,000. Tax credits during a recession are nothing new. Both President George W. Bush and Barack Obama offered tax credits, which did increase home sales. Biden has pledged to expand the U.S. Housing and Urban Development's Good Neighbor Next Door Sales Program to help national and public service workers purchase homes. These buyers would need to buy houses in either poorer neighborhoods or more expensive areas that don't offer much affordable housing. As for exactly whom and where this plan would be implemented is still in the air. College graduates are more likely to purchase homes, but with the ever-increasing cost of higher education, recent graduates are saddled with so much debt, home buying seems unattainable. However, Biden is supportive of erasing $10,000 from everyone's student loan debt, which could al- leviate monthly payments enough to allow people to put that money elsewhere—more specifically towards a mortgage. When it comes to qualifying for a mortgage, many credit-de- termining factors are ignored, like rent, utility, and even cellphone bill payments. A public credit agency would have the capacity to factor in these histories, allowing "credit-invisible" people to qualify for loans that they wouldn't have qualified for using traditional banking methods. It's no secret that inventory, especially new builds, has been much lower than usual. But Biden has pledged to incentivize local and state governments to erase regulations that have made it difficult for builders to plan and construct new housing. He also wants to put $100 billion towards building and upgrading affordable housing. New homes would have the potential to ease some of the rapid appreciation that we've seen recently.

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