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Updated: September 19, 2024
This article provides information about The Decent, Affordable, Safe Housing for All 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.
First-time home buyers may soon benefit from a new $15,000 tax credit, courtesy of the DASH Act.
The DASH Act is a bipartisan, bicameral housing bill introduced in March 2023 in the Senate, and in January 2024 in the House of Representatives. The DASH Act includes a $15,000 tax credit for first-time home buyers.
The DASH Act is different from the $15,000 First-Time Home Buyer Tax Credit, which was re-introduced as a bill in March 2024; and from the $10,000 First-Time Home Buyer Mortgage Relief Credit President Biden introduced in his 2024 State of the Union address.
The DASH Act sponsors are Senator Ron Wyden of Oregon in the Senate and Representatives Val Hoyle [D-OR-4] and Salud Carbajal [D-CA-24] in the House.
The DASH Act is a bill introduced by Sen. Ron Wyden in the Senate and Rep. Val Hoyle in the House of Representatives.
DASH is an acronym. It stands for Decent, Affordable, Safe Housing for All.
The DASH Act creates home construction incentives, directs money to cities for zoning and improvements, and expands homeownership opportunities for first-time buyers. It benefits low- and moderate-income households, affordable housing builders, and state and local housing agencies.
The DASH Act is large, with more than twenty sections. Some of its key components include:
For people who meet the bill’s first-time home buyer definition, though, the DASH Act’s most notable is its $15,000 refundable tax credit, which we discuss in more detail below.
Check your eligibility and begin your application now.
The DASH Act includes a refundable first-time home buyer tax credit of up to $15,000.
Eligible first-time buyers receive a federal tax bill credit equal to twenty percent of their home’s purchase price, up to a maximum tax credit of $15,000. The U.S. Treasury will issue home buyers a tax refund check if their DASH Act tax credit exceeds their tax liability.
Decent, Affordable, Safe Housing for All eligibility is based on four criteria:
The DASH Act is available to first-time home buyers only, but the program defines a first-time buyer as a person who has never owned a home in their lifetime. The DASH Act definition is notable because it’s different from how other first-time home buyer programs define the term.
Note: The DASH Act does not require home buyers to be first-generation home buyers or members of a minority or protected class as other congressional bills do, such as the $25,000 cash grant Downpayment Toward Equity Act.
DASH Act buyers must also:
And lastly, DASH Act-eligible buyers must purchase their home in an arms-length transaction and take residence within 60 days of settlement.
The DASH Act is a bill for low- and moderate-income households, so the $15,000 tax credit phases out when home sale prices exceed local mortgage loan limits by 10 percent or more.
In most parts of the country, the conforming mortgage loan limit is $806,500. In high-cost areas, it can range of up $1,209,750. Whatever your local mortgage loan limit, the DASH Act allows a ten percent buffer. When buyers purchase homes above DASH Act limits, their credit reduces by $1,500 per $10,000 in the purchase price until the credit reaches zero.
Note: The DASH Act’s tax credit cannot exceed 20 percent of a home’s purchase price. Buyers who purchase homes for $75,0000 or less receive a lesser credit.
The DASH Act tax credit is limited to low- and moderate-income home buyers.
To get the bill’s full $15,000, buyers and their modified adjusted gross income must meet the below eligibility requirements. Buyers who earn above program limits receive a reduced home-buying tax credit that phases out as income levels rise.
According to the IRS, your modified adjusted gross income is the sum of everything earned in a calendar year – wages, tips, investment income, farm income, and more – minus certain tax-deductible expenses such as retirement plan contributions, student loan interest, and specific business expenses.
Married persons filing separately cannot get the DASH Act credit.
The DASH Act is for primary residences only. It is not for second homes, vacation homes, flipped homes, and short- and long-term rental properties.
Therefore, buyers who change their primary residence within five tax years of making a DASH Act purchase are subject to a tax credit recapture, payable to the IRS.
The DASH Act repayment schedule is as follows:
The DASH Act makes exceptions to the 5-year rule for homeowners facing unforeseen and severe circumstances, including the death of the homeowner or their spouse, job loss or job-related relocation, and illness that results in the inability to work or maintain employment.
Military relocations are also eligible for exception.
First-time home buyers aren’t required to apply for the DASH Act because the bill is a tax credit – it’s not a special mortgage like the LIFT Act or the HELPER Act.
Eligible DASH Act buyers claim their home purchase credit as part of their annual federal tax filing. Proof of purchase requires only an attestation and settlement statement or closing disclosure from a mortgage company.
Because it’s a tax credit, the DASH Act can be combined with any available mortgage program, including popular low-down-payment mortgages like HomeReady, Home Possible, and Conventional 97, which each allow a 3 percent down payment, and USDA mortgages and VA mortgages, which both allow nothing down.
The DASH Act tax credit adjusts annually with inflation, rounded to the nearest thousand. Therefore, if inflation is 5 percent in the program’s first year, the maximum DASH Act tax credit rises to $16,000.
As of today, December 21, 2024, the DASH Act is not yet passed into law. It’s a bill in the House (H.R. 6970) and the Senate (S.680) and is currently in committee with both bodies.
Housing bills tend to move slowly through Congress until they’re ready to pass. The DASH Act could pass into law this year, next year, or never. While Congress debates, government mortgage agencies are making rules to help buyers, including giving discounts on today’s mortgage rates and lowering mortgage insurance rates.
Yes, first-time buyers can claim the DASH Act tax credit for purchasing a new construction or move-in ready home.
The DASH Act defines a first-time home buyer as someone who has never owned a home. Other first-time buyer programs define a first-time buyer as someone who hasn’t owned a home in the last 36 months.
Yes, the DASH Act is a tax credit that buyers can combine with other first-time home buyer grants, including the $25,000 grant for first-time buyers and any local or municipal cash grant programs.
The DASH Act tax credit is limited to 20 percent of a home’s purchase price. Therefore, buyers of a $60,000 home receive a maximum $12,0000 federal tax credit.
Yes, the DASH Act is a bill to help first-time home buyers. There are no restrictions on how buyers finance a home. Cash buyers are allowed.
The HELPER Act, which is officially titled “Homes for Every Local Protector, Educator, and Responder Act”, is a no-money-down, no mortgage insurance program for teachers, law enforcement officials, and firefighters. We expect the HELPER Act to pass into law as early as mid-2024.
No, the DASH Act and the Biden $15,000 First-Time Home Buyer Tax Credit are different bills. The author of the DASH Act describes it as a “generational investment” in housing and home affordability. The Biden tax credit is simply a tax credit.
This article, "The DASH Act: $15,000 Tax Credit For First-Time Home Buyers," 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 September 19, 2024.
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