If you’ve been struggling to find your dream home amidst stiff competition and soaring prices, relief might be on the horizon. The proposed End Hedge Fund Control of American Homes Act, introduced in Congress, aims to address the housing crisis by curbing the influence of institutional investors like hedge funds in the real estate market.

What is the End Hedge Fund Control of American Homes Act?

Introduced in 2023 by Senator Jeff Merkley and Representative Adam Smith, this bipartisan bill seeks to tackle the issue of dwindling housing inventory by restricting institutional investors from purchasing single-family properties. These investors, with their substantial financial resources, often outbid regular homebuyers and contribute to skyrocketing prices, making homeownership increasingly unattainable for many.

The bill proposes a two-pronged approach:

Ban on Future Purchases: Hedge funds and similar entities would be prohibited from acquiring single-family homes going forward.
Portfolio Sell-Off: Existing institutional investors would be required to gradually sell off at least 10% of their residential real estate holdings annually over a 10-year period, ultimately emptying their portfolios.

The potential impact of this legislation is significant. With an estimated 574,000 properties currently held by institutional investors, injecting these homes back into the market would offer much-needed relief to prospective buyers.

Has the Bill Been Passed?

As of December 2023, the End Hedge Fund Control of American Homes Act has not yet been passed. While there is hope for its eventual approval, the legislative process can be unpredictable, and there is no set timeline for its enactment. However, the bill represents a crucial step towards addressing the housing crisis and ensuring fair access to homeownership for all.

Other Housing Policies in Consideration

While we await progress on the End Hedge Fund Control of American Homes Act, there are other potential avenues for improving housing conditions. Several bills, including the Neighborhood Homes Investment Act, the First-Time Home Buyer Tax Credit, and the Downpayment Toward Equity Act, are under consideration. These measures aim to provide financial assistance and support to aspiring homeowners, although their passage is not guaranteed.

Exploring Homeownership Opportunities

Despite the uncertainty surrounding legislative changes, there are existing programs and resources to assist you on your journey to homeownership:

First-Time Home Buyer Mortgages: Various loan programs offer favorable terms for first-time buyers, including low down payment requirements and flexible credit score criteria.
Down Payment Assistance Programs: Many states offer down payment assistance programs to help bridge the gap between savings and homeownership costs, making buying a home more achievable.

The End Hedge Fund Control of American Homes Act holds the promise of reshaping the real estate landscape, making homeownership more accessible and affordable for individuals and families across the country. While its fate remains uncertain, it’s essential to stay informed about potential legislative changes and explore available resources to pursue your homeownership goals.

If you have questions or are interested in a no hassle, no obligation consultation, reach out to us directly at (210) 341-5626 or info@newhorizonmortgage.com.