Proposal would give first-time Utah homebuyers $20,000

Feb 21, 2023, 5:41 PM | Updated: Mar 10, 2023, 1:28 pm
first time homebuyer Utah...
The down payment, and a fast-moving market are getting in the way of some first-time homebuyers. Photo: Getty Images

SALT LAKE CITY — First-time Utah homebuyers could get a lift into homeownership if a bill on Capitol Hill passes this year.

First-time Homebuyer Assistance Program is sponsored by Senate President Stuart Adams, R-Layton.

Only new homes priced at $450,000 or less qualify under S.B. 240

The bill says qualifying homebuyers can use the money for a down payment, closing costs and reducing the interest rate on the qualifying mortgage loan or any combination of the three.

S.B. 240 passed unanimously on Friday out of the Senate Economic Development and Workforce Services Committee. The next stop is the full Senate for a vote.

The median list price for a three-bedroom home in Salt Lake City last month was $550,000, according to Rocket.

Adams joins Dave and Debbie to explain and to discuss his proposal.

Focus on first-time homeowners, not multifamily apartments, Adams says

“This isn’t one of those things where you can jump in, buy it, cash out the [$20,000] and then flip it the next year, right? They’re trying to genuinely make it more possible for first-time homebuyers to get into a home,” Dave said. “My concern is why should I be paying for your kids down payment?”

He said when he bought his first home he had to borrow money for the down payment from family members.

Stuart said the state has spent hundreds of millions of dollars on affordable housing units for multifamily apartments. He stressed the focus should be on single-family homeownership.

 “If we actually believe homeownership has value, then perhaps we ought to pivot and start trying to look at things that help the first homebuyer,” he said. 

The landlord-tenant process will eventually erode the middle class, he claimed.

“When people get to be 65 years old, what are they going to have for retirement? I guess a higher rent payment. We’re not seeing homeownership, and it really concerns me,” Adams said.

Home supply not meeting demand of first-time homebuyers, Adams said

Mayors and community councils permit building homes on smaller lots, but the profit margin isn’t there for developers.

“This is a supply and demand issue,” Adams said. “What it’s [the bill] doing is focusing municipalities and the development community and give them incentives to try to bring that first-time homebuyers into the marketplace.” 

The Senate president said the $20,000 allotted in his bill could mean first-time homebuyers can buy down the interest rate on the home that they could not otherwise afford.

“What we’re seeing right now — this is a moment in time — when interest rates have gone from 3% to 6%,” he said. “You can take this $20,000 . . . [and] buy down the interest rate. When you buy down the interest rate to a 3%, you bring more people into the markets who can qualify — these first homebuyers — and that doesn’t exist with other products or other financing tools.”

Debbie said she likes Adam’s bill because new couples and families may not leave the state to find affordable homes.

“I’m with President Adams. You look around at the townhomes, and even those are out of reach for a lot of first-time homebuyers,” she said. “If this is the trick that keeps our kids here, that’s another thing we talk about — keeping our kids here, not let them scattering them around the country as they go look for more affordable housing to buy — then so be it.”

Dave & Dujanovic can be heard weekdays from 9 a.m. to noon. on KSL NewsRadio. Users can find the show on the KSL NewsRadio website and app, as well as Apple Podcasts and Google Play.  

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Proposal would give first-time Utah homebuyers $20,000