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Updated: November 4, 2024
This article provides information about The First-Time Homebuyer Tax Credit Act, a proposed bill that has not yet been passed into law. Please note that details are subject to change as the legislative process continues.
The First-Time Homebuyer Tax Credit Act of 2024 is proposed legislation offering up to $15,000 in federal income tax credits to first-time home buyers. These credits can either be claimed in cash or applied directly at closing as down payment assistance.
Formally known as H.R.7707 in the House of Representatives and S.3940 in the Senate, the bill is commonly linked to President Biden and often referred to as the Biden First-Time Homebuyer Tax Credit.
In the media, the bill is sometimes called:
The original version of the First-Time Homebuyer Act was introduced on April 28, 2021, but did not pass during the previous congressional session. It was reintroduced as the First-Time Homebuyer Tax Credit Act on March 14, 2024, in the Senate by Sen. Sheldon Whitehouse, and on March 15, 2024, in the House by Rep. Jimmy Panetta.
The revamped 2024 bill is more advantageous for home buyers, allowing them to claim the $15,000 tax credit immediately at closing to cover down payment, closing costs, and other fees.
As of December 21, 2024, the First-Time Homebuyer Tax Credit Act of 2024 has not yet been signed into law.
This article explains the $15,000 First-Time Homebuyer Tax Credit, its eligibility criteria, and how it compares to other first-time home buyer programs.
The First-Time Homebuyer Tax Credit is a $15,000 federal tax credit for first-time home buyers. It is not yet passed into law.
Eligible home buyers must meet the following criteria according to the bill’s most recent language.
Eligible home buyers may not have owned a home or been a co-signer on a mortgage loan within the last thirty-six months, encompassing primary residences, second homes, and vacation rentals. Buyers who owned a home more than thirty-six months ago and home buyers who own commercial properties through a business remain eligible.
Eligible home buyers may use their tax credit once only. Suppose you claim your federal tax credit under the First-Time Homebuyer Act in 2024, for example. In that case, you may not claim the credit again.
Eligible home buyers must earn an income within 150 percent of the area’s median income, based on their household size, after which the available tax credit begins phasing out. For example, in Columbus, Ohio, where a standard median household income is $63,000, eligible home buyers who file as single earners must have a household income of less than $94,500 annually.
For home buyers who earn more than 150% of the area median income based on household members, the tax credit phases out $750 for every $1,000 over the limit.
Eligible home buyers must purchase a home that falls within 110 percent of the area median purchase price, after which the available tax credit begins phasing out. For example, in Milwaukee, Wisconsin, where the median purchase price is $372,400, eligible homes must have a purchase price which is at most $409,640.
For every 1 percentage point that the home’s purchase exceeds the 110% area median purchase price limit, the home buyer’s tax credit award is reduced by $1,000.
| If The Purchase Price Exceeds The Median By… | Your Tax Credit Is… |
| $0 | $15,000 |
| $1,000 | $14,000 |
| $2,000 | $13,000 |
| $3,000 | $12,000 |
| $4,000 | $11,000 |
| $5,000 | $10,000 |
| $6,000 | $9,000 |
| $7,000 | $8,000 |
| $8,000 | $7,000 |
| $9,000 | $6,000 |
| $10,000 | $5,000 |
| $11,000 | $4,000 |
| $12,000 | $3,000 |
| $13,000 | $2,000 |
| $14,000 | $1,000 |
| $15,000 | $0 |
Eligible home buyers must be 18 years of age on the date of purchase or married to a person at least 18 years of age. This rule prevents adults from buying a home with cash in a child’s name, then claiming the tax credit on the child’s income tax returns.
Eligible home buyers must be making an arms-length transaction. They may not purchase their home from a relative, including a spouse, parent, child, aunt, uncle, cousin, or grandparent. The bill provides no specific guidance regarding purchasing a home from an entity controlled by a relative, such as a trust.
Check your eligibility and begin your application now.
As of December 21, 2024, Congress must still enact the First-Time Homebuyer Act. It’s an active bill with multiple co-sponsors but is not yet scheduled for a vote.
This is the second time the First-Time Homebuyer Act has been discussed with Congress. In the 2021-2022 congressional session, a similar $15,000 first-time home buyer tax credit was proposed, but that bill failed to get a vote.
It’s common for the legislative process to span multiple Congresses – especially for programs important to the current administration.
For example, President Biden often speaks of inclusion, fairness, and equality for first-time home buyers, including:
The First-Time Homebuyer Act of 2024 reflects these ideas.
As of December 21, 2024, the House version of the bill, H.R.7707, has 1 cosponsor:
| Representative | District | Date |
| Rep. Blumenauer, Earl | [D-OR-3] | March 15, 2024 |
As of December 21, 2024, the Senate version of the bill, S.3940, has 9 cosponsors:
| Senator | State | Date |
| Sen. Heinrich, Martin | [D-NM] | March 14, 2024 |
| Sen. Welch, Peter | [D-VT] | March 14, 2024 |
| Sen. Smith, Tina | [D-MN] | March 14, 2024 |
| Sen. Reed, Jack | [D-RI] | March 14, 2024 |
| Sen. Baldwin, Tammy | [D-WI] | March 14, 2024 |
| Sen. Rosen, Jacky | [D-NV] | March 14, 2024 |
| Sen. Blumenthal, Richard | [D-CT] | March 19, 2024 |
| Sen. Van Hollen, Chris | [D-MD] | April 15, 2024 |
| Sen. Tester, Jon | [D-MT] | September 11, 2024 |
The First-Time Homebuyer Tax Credit is a tax refund from the U.S. Treasury. It’s claimable retroactive to the last calendar tax year, and payable at closing with the help of a mortgage lender or when the IRS processes a buyer’s tax returns.
The refund is a cash payment and qualifies as down payment assistance.
The First-Time Homebuyer Act pays eligible first-time buyers a tax refund of 10% of a home’s purchase price, up to $15,000, and makes annual adjustments for inflation.
Assuming 3 percent inflation over the next five years, here’s how big the tax credit can get
Married households who file their taxes separately may claim half of the available credit, and non-married buyers may claim their proportional share of the credit.
The First-Time Homebuyer Act builds long-term wealth for low- and middle-income households through real estate. It specifically legislates away from house flippers and real estate investors.
Therefore, buyers claiming the credit who change their primary residence or sell their home within four years of purchase will realize a tax liability for moving out.
Assuming a $15,000 tax credit:
The repayment rule has exceptions.
One exception states that home buyers who sell their home within four years to a non-relative whose real estate gains are less than their tax liability must only pay their real estate gains.
For example, if you received a $15,000 credit when you bought your home, sold your home to somebody related to you in the first 12 months, and made five thousand dollars on the sale of your home, your tax repayment amount would be $5,000.
Other exceptions include death, divorce, and certain military transfers.
The $15,000 First-Time Homebuyer Act is among the more likely first-time buyer programs to pass into law because the bill has precedent; it’s a modified version of the 2009 Obama-era $8,000 First-Time Homebuyer Tax Credit, which more than 2.6 million renters used to buy their first home.
Today’s buyers have different needs compared to 15 years ago. Still, the market shows similarities as compared to 2009.
In its last election cycle, the Biden Administration pledged to make homes more affordable, increase wages among low-earning households, and reduce wealth gaps due to race. The First-Time Homebuyer Act meets all three criteria.
Yes, the First-Time Homebuyer Act is known by several names, including the Biden First-Time Homebuyer Tax Credit, the Biden Homebuyer Credit, and the $15,000 Homebuyer Tax Credit. They’re all the same thing.
No, the $15,000 first-time homebuyer tax credit is not yet available. Subscribe to our newsletter for updates on this and other bills.
Yes, the First-Time Homebuyer Act will be retroactive to December 31 of the preceding calendar year so eligible buyers can amend their federal tax returns and get an instant Treasury payment.
Eligible first-time home buyers aren’t required to apply for the $15,000 first-time home buyer tax credit. When you meet the program’s eligibility requirements, the IRS credits your tax bill automatically.
If you move or sell your home within four years of using the program, you must pay back at least some of your tax credit. There are exceptions for death and military transfers.
Yes, you can claim the first-time home buyer tax credit if you purchase a home with a non-relative and only one of you is a first-time buyer. In this example, the credit reduces by 50%, and the first-time home buyer claims $7,500 on their tax returns.
When you buy a home and claim the $15,000 first-time home buyer tax credit, the tax credit’s effective date is the date of closing.
The first-time buyer program works for any home zoned for residential property, including trailer homes, mobile homes, and manufactured homes.
No, the $15,000 First-Time Homebuyer Act is different from the $25,000 program. The $25,000 program for first-time home buyers is the Downpayment Toward Equity Act.
Yes, first-time home buyers can use as many first-time home buyer programs for which they’re eligible.
Use this chart to find the median income for an area, then multiply that number by 1.6. Your income is eligible if your household income is less than or equal to the product.
Yes, you can use your first-time home buyer tax credit to purchase a multi-unit home if one of the units is your primary residence.
No, the Downpayment Toward Equity Act differs from the First-Time Homebuyer Tax Credit. The Downpayment Toward Equity Act is a bill that proposes $25,000 cash grants to offset closing costs, taxes, and interest for eligible first-time buyers. The bills could be combined, creating a forty-thousand-dollar incentive for renters to buy their first home.
The DASH Act proposes a $15,000 tax credit for eligible buyers.
This article, "The $15,000 First-Time Home Buyer Tax Credit: Reviewed," authored by Dan Green, is based on extensive professional mortgage experience and includes references to trusted sources such as industry-leading financial institutions and expert research from the following websites:
This article was last updated on November 4, 2024.
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