First Time Homebuyer Debt Reduction Act

The First Time Homebuyer Debt Reduction Act (H.R. 10084) sets rules for how government-sponsored mortgage entities account for student loan payments made by third parties on behalf of someone buying a home.

* **Federal agencies and entities:** The Federal Housing Finance Agency (FHFA), Fannie Mae, and Freddie Mac (referred to as "the enterprises"). * **Homebuyers:** Buyers purchasing a newly constructed primary residence who have Title IV student loan debt. * **Interested parties:** Sellers, builders, or other third parties who contribute funds toward a homebuyer's student loan debt.

* **Mandatory regulatory action:** Within 30 days of the bill becoming law, the Director of the FHFA is required to issue a rule directing Fannie Mae and Freddie Mac to update their mortgage classification standards. * **Loan classification rules:** * Payments made by an interested party toward a buyer’s Title IV student loan must be categorized as a "financial concession" regarding interested party contributions. * Any portion of a student loan payment from an interested party that goes over $25,000 must be classified as a "sales concession."

The provided text does not mention any federal appropriations, spending, taxes, fees, or direct financial assistance provided by the government.

* **Property type restriction:** These accounting rules only apply to the purchase of a newly constructed principal residence. * **Loan type restriction:** Covered payments are limited to Title IV student loans. * **Cap on financial concessions:** Interested party student loan payments are subject to a $25,000 threshold; anything above that amount shifts to a different classification (a sales concession).

This bill requires federal housing regulators to establish standardized rules within 30 days so that Fannie Mae and Freddie Mac treat third-party student loan contributions up to $25,000 as "financial concessions"—and any amount over $25,000 as "sales concessions"—when evaluating mortgages for newly built homes.