Video Transcript
The DASH Act – a bill that includes money, support, and a $15,000 first-time home buyer tax credit is now in the House and the Senate. Let’s learn more. [Homebuyer.com doorbell.
Make your dogs bark.] I’m Dan with Homebuyer.com. We are the mortgage company for first-time home buyers. Let’s jump in – this video – is about the DASH Act – a housing bill – in Congress – in the House and the Senate.
DASH is an acronym – it stands for Decent, Affordable, Safe Housing for All. And, you may remember us talking about the DASH Act once before – because it was first introduced in the last Congress – where it died – as many bills do – but – it turns out – the DASH act was only “mostly dead”. You see, there’s a big difference between being mostly dead and all dead – mostly dead means slightly alive.
And here we are. Introduced – as Senate Bill S.680 – and House Bill H.R. 6970 – the DASH Act is a big one – ambitious – its author refers to it as “generational” for its size and scope – with twenty-plus parts – to make housing more affordable – attainable – to expand homeownership opportunities.
We’ve listed those 20-plus parts on the website – you can look them up there – here – we’re going to explain the one part of the DASH Act’s you’re likely here for – and that the first-time homebuyer tax credit – a $15,000 refund – that brings American Dream of homeownership within reach for so many. And here’s how that tax credit works. And by the way, you never need to apply for the DASH Act.
It’s automatic to you. Because it’s a tax credit – not a mortgage program. When you buy a home – to get your credit – all you’ll have to do is attest that you bought the house – and show proof that you made a purchase – with a settlement statement or something similar.
So, if your tax bill is $15,000 and the Dash Act gives you $15,000 in tax credits, your tax bill – come April 15 – becomes zero. It also means you can get a refund on your income tax bill if the credit exceeds what you owe. Up to $15,000 back in your bank – courtesy of the IRS.
Now, not every first-time buyer will be DASH Act-eligible. For one, you have to be a first-time buyer – obvious, right – but – the way that the DASH Act defines first-time buyer is different from how lenders – and other first-time buyer programs – define first-time buyer – so this is new. In the DASH Act, a first-time buyer is any person who has never owned a home at any point in their life.
A literal definition – that’s more strict than other programs that allow buyers to re-declare as first-time buyers after 36 months of renting. Also, to claim the credit, buyers must be at least 18 years old – must not be claimed by anybody else as a dependent – must be buying their first home on the open market – so not from a relative or close friends – and also, buyers must be buying the home as a main residence – a primary home. Most buyers meet these criteria anyway but it’s important we list it out.
Oh! Also. The credit is for U.S.
citizens and permanent resident aliens only – people with a green card. Again, most buyers – but still important. The next eligibility checks of the DASH Act relate to the home itself.
And, again, most first-time buyers will sail through the requirements. The DASH Act states that the $15,000 credit only applies for homes that are sold within 110 percent of the conforming mortgage loan limit for the area in which you’re buying – which means – take your local conforming mortgage loan limit – which in most parts of the country is just over $766 thousand dollars – add 10 percent to that number – and you have your upper-range price limit to use the DASH Act – which is like $843,000. Buy a home over that price point – and the amount of your tax credit is diminished – a little bit for each $10,000 over until your credit falls to nothing.
Again, most first-time buyers aren’t buying homes for $843,000 so the DASH Act price limit affects only a narrow band of buyers. Same for the third DASH Act qualification – which is household income – because at its core – the DASH Act is a bill to promote affordable housing and homeownership for low- and middle-income households. So, the DASH Act is only available to buyers who file taxes as singles and earn less than $100,000 per year – file as singles with dependents and earn less than $150,000 per year – or – file jointly with a spouse and earn less than $200,000 per year.
Also – because people are sly when it comes to taxes – the $15,000 first-time buyer tax credit cannot be claimed by either member of a married couple that files their taxes separately – too much potential for gaming the system. Now the fourth DASH Act requirement is a gimme – and it’s the requirement that first-time buyers move into the home they’re buying – and live there – as their main residence. Doing that – gets you the full first-time buyer credit – up to $15,000.
But – if you move out within five years of moving in – cease to make this home your main home – a pro-rated portion of your Dash Act credit must be repaid. If you move after one year, you’ll pay 80 percent back of the credit. If you move after two years – you’ll pay 60 percent back.
After three years, it’s 40 percent – and so on until the five years have passed and nothing is owed at all. Now, the DASH Act is written like this because – remember – it’s a bill for long-term homeownership – for Americans to build roots in communities and build wealth. It is not for flippers, for example.
But there are a few exceptions to the $15,000 pay-it-back-if-you-move-in-5-years rule. Those exceptions are: there’s a death to your spouse or to you – you’re relocated for duty, in the military – you lose your job or have to move as part of a job relocation – you fall ill and can’t work or keep your job – all of these are exceptions to the 5-year DASH Act rule and no repayment is required if meet one or more of these conditions. And that is the DASH Act – Senate Bill 680 – House Bill 6970.
A bill that makes more homes available for renters, gives big tax credits to first-time buyers of homes, and supports affordable homeownership for everyone. [Disclaimers] If you liked this video and you’re ready to see how much home you can afford at today’s current interest rates, you can get an immediate mortgage approval on the site – 3 minutes or less – no paperwork required. I’m Dan with Homebuyer.com, the mortgage company for first-time buyers.
Happy homebuying.
