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Updated: January 22, 2025
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 is a bill that gives eligible first-time home buyers up to $15,000 in federal income tax credits.
The bill was first introduced in the 117th Congress (2021-2022) and then again in the 118th Congress (2023-2024). It did not pass into law during either session, which is common; only 4% of bills become law, according to FactCheck.org.
However, because the sponsors of the First-Time Homebuyer Tax Credit Act — Senator Sheldon Whitehouse and Representative Jimmy Panetta — still serve their constituents in the current 119th Congress, it’s possible the bill will be reintroduced as a first-time home buyer program.
If it’s reintroduced, the bill won’t likely be known as the Biden First-Time Homebuyer Tax Credit as it was before. More likely, the First-Time Homebuyer Tax Credit Act will be referred to by any of these names:
As of March 26, 2025, the First-Time Homebuyer Tax Credit Act has not been introduced in the 119th Congress. This article will discuss the $15,000 First-Time Homebuyer Tax Credit as it may be written, based on prior iterations of the bill.
Bills often change on their way to becoming law, so this page will update as details emerge.
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The First-Time Homebuyer Tax Credit is a $15,000 federal tax credit for first-time home buyers. It has not been introduced as a bill as of March 26, 2025 in the 119th Congress (2025-2026). It was introduced in each of the prior two congressional sessions and did not receive a vote in either.
The First-Time Homebuyer Tax Credit Act may re-introduce in the current Congress with similar language to its prior two iterations. If the bill’s eligibility requirements are the same, eligible first-time home buyers must meet the following criteria to receive up to $15,000 in federal tax credits.
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 2025, 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 the Census Bureau shows a median household income near $65,300, eligible home buyers who file as single earners must have a household income of less than $98,000 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 and 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.
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As of March 26, 2025, Congress has not introduced the First-Time Homebuyer Tax Credit Act as a bill. A bill must be introduced before it can become law.
In the 117th Congress (2021-2022), the $15,000 tax credit bill was introduced in April 2021 — 3 months after Congress reconvened. In the 118th Congress (2023-2024), the bill was introduced in March 2023 — 2 months after Congress reconvened.
The 119th Congress reconvened on January 3, 2025. If the bill follows a similar pattern, the First-Time Homebuyer Tax Credit Act of 2025 will be introduced in Spring 2025.
The First-Time Homebuyer Act of 2024 reflects these ideas.
When the First-Time Homebuyer Tax Credit Act expired at the end of the 118th Congress (2023-2024), the House version of the bill, H.R.7707, had 1 cosponsor:
| Representative | District | Date |
| Rep. Blumenauer, Earl | [D-OR-3] | March 15, 2024 |
When the First-Time Homebuyer Tax Credit Act expired at the end of the 118th Congress (2023-2024), the Senate version of the bill, S.3940, had 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 must be introduced as a bill and receive a vote before it can pass into law. As of today, March 26, 2025, the bill is not yet introduced.
However, compared to many first-time home buyer bills, the $15,000 tax credit bill is simply structured. It’s based on the 2009 Obama-era $8,000 First-Time Homebuyer Tax Credit, which, according to the U.S. Treasury, more than 2.6 million people used to buy their first home.
Although home buyers in 2025 face a different economic reality as compared to 2008, today’s housing market shows similarities:
The First-Time Homebuyer Act addresses these issues by making homes more affordable and reducing wealth gaps between renters and homeowners.
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. With his presidency over, It’s unlikely that a reintroduced version of the bill will be nicknamed with “Biden”.
No, the $15,000 first-time homebuyer tax credit is not yet available. Subscribe to our newsletter for updates on this and other bills.
In the last version of the bill, the First-Time Homebuyer Tax Credit Act was declared to be retroactive to December 31 of the preceding calendar year so eligible buyers could amend their federal tax returns for an instant Treasury payment. It’s unknown whether an updated version of the bill will be retroactive.
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 January 22, 2025.
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