Proposed Tax Credit For First Time Home Buyer’s Under Biden 

The Biden First-Time Home Buyer Act proposes legislation to ease the financial burden for first-time home buyers. This article explores the key aspects of the Act, its current legislative status, potential benefits, and other programs that could assist new home buyers.

Understanding the Biden First-Time Home Buyer Act

The Biden First-Time Home Buyer Act proposes a refundable tax credit of up to $15,000 for eligible first-time home buyers. Inspired by a similar credit from 2008, the 2021 proposal aims to make homeownership more accessible by offering a tax credit equal to 10% of the home’s purchase price, capped at $15,000.

Current Status of the Legislation

As of May 2024, the Act has not been passed into law. The House of Representatives approved the bill in March 2021, but it awaits Senate approval. The passage remains uncertain due to a lack of clear majority support.

Eligibility Requirements

While the bill is yet to be finalized, anticipated eligibility criteria include:

• The home buyer should not have owned or cosigned a mortgage within the past three years.
• The buyer’s income should not exceed 60% above the area median income (AMI), with adjustments for joint filers.
• The home’s purchase price must not exceed the local median.
• The property must be the buyer’s primary residence.

The $25,000 Home Buyer Grant

Parallel to the tax credit, the Down payment Toward Equity Act proposes a $25,000 grant to assist first-time home buyers with down payments. This separate bill, which is also pending approval, targets easing the initial financial hurdle of purchasing a home.

Alternative Assistance for First-Time Home Buyers

For those not wanting to wait for new legislation, existing programs offer substantial help:

• Statewide Assistance: Many states provide special mortgage loans or help with down payments and closing costs.
• First-Time Home Buyer Loans: These loans often feature favorable terms such as lower down payments and reduced interest rates, tailored to make the transition from renting to owning smoother.

Frequently Asked Questions (FAQs)

Understanding the $15,000 First-Time Homebuyer Act This proposal offers up to $15,000 in tax credits to eligible first-time home buyers, aiming to reduce the homeownership gap by assisting with purchasing costs.

Is the First-Time Home Buyer Tax Credit Law? No, as of May 2024, the tax credit is still a proposal and has not become law.

Why Support First-Time Home Buyers? This initiative seeks to make homeownership more accessible, especially for low-income and first-generation buyers, thereby stabilizing the housing market and enhancing economic inclusivity.

Benefits for First-Time Home Buyers These benefits often include special mortgage rates, down payment assistance, and potential tax credits to make the first home purchase more affordable.

Defining First-Time vs. New Home Buyers A first-time home buyer has not owned or co-signed a mortgage in the past three years. In contrast, a new home buyer might have previously owned a home but is purchasing another.

Conclusion

The Biden First-Time Home Buyer Tax Credit represents a significant step towards making homeownership more attainable for many Americans. By understanding the potential benefits and keeping informed about the progress of the legislation, prospective buyers can better prepare for the opportunities that these initiatives could provide. For personalized advice and the latest updates, consulting with a real estate or tax professional is recommended.

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