How a Biden Presidency Could Change the Housing Market

The Democratic nominee has some ideas that could impact housing in a meaningful way.

The United States is deep in the throes of a housing crisis. There's a shortage of affordable homes for low-income families, and tens of millions of Americans spend more than 30% of their income on housing. To that end, Democratic nominee Joe Biden has some ideas on how to change the housing market for the better. Here are some highlights from his campaign.

1. Protect homeowners from abusive lending practices

Unfortunately, some mortgage lenders are known to engage in practices that hurt homeowners financially. Biden proposes a new Homeowner and Renter Bill of Rights that seeks to prevent mortgage brokers from charging borrowers more than what's appropriate (which generally occurs by jacking up their closing costs and fees). The Bill of Rights will also protect homeowners in the process of loan modification from foreclosure and give homeowners a clear path of recourse when lenders attempt to violate these protections.

2. Protect renters from abusive landlords

The aforementioned Bill of Rights will help renters, too. Landlords will not be allowed to discriminate against tenants who are receiving federal housing benefits. Furthermore, Biden's plan will provide legal assistance to tenants facing eviction.

3. End discriminatory practices in the housing market

Redlining, or denying mortgages in specific communities due to their demographics, has long been a problem. Biden seeks to end that practice. He wants legislation that requires any state that receives certain federal grants to develop inclusionary zoning policies.

Along these lines, Biden wants to hold financial institutions accountable for discriminatory lending practices. That way, borrowers of all backgrounds and from all communities have a chance at financing a home. This standard will apply to non-bank lenders as well.

Biden also envisages a national standard for home appraisals. It's often easier to sell or refinance a mortgage on a home with a higher appraised value. But homes in communities primarily made up of people of color tend to have lower assessed values than those in communities where most homeowners are white. That's something Biden is hoping to fix.

4. Provide a tax credit for first-time homebuyers

Owning a home is said to offer more financial stability than renting, but many people can't buy due to a lack of funds. Biden's new, refundable tax credit worth up to $15,000 for first-time buyers would make home ownership more attainable. The First Down Payment Tax Credit will help families offset the costs of buying their first property. Homebuyers will receive the credit as soon as they buy a home rather than having to wait until they file taxes the following year.

5. Supply more renters with housing vouchers

It's estimated that 75% of households eligible for Section 8 rental assistance do not receive it because the program is underfunded. Biden seeks to expand that funding to give rental assistance to more families. The idea is to avoid scenarios where anyone is forced to spend more than 30% of their income on housing.

6. Create a new renter's tax credit

Some families earn too much money to qualify for Section 8 vouchers but still need help. Biden wants to introduce a new renters tax credit for households at certain earning levels that would reduce rent and utilities to no more than 30% of income.

If affordable housing is a major issue for you, it pays to read up on how both presidential candidates plan to deal with it. In the coming weeks, there should be plenty of opportunities to tune into debates and hear more about their plans.