What is the First-Time Homebuyer Act of 2021?

First time home buyer filing their taxes to receive a homebuyer credit under Biden's First Time Homebuyer Act of 2021.

President Joe Biden’s First-Time Homebuyer Act of 2021 promises a tax credit worth up to $15,00 for first-time buyers in the United States. Representatives Jimmy Panetta and Earl Blumenauer presented the act to the House in late April 2021.

The act will help low and middle-income Americans enter homeownership during a time where the market is soaring higher and more competitive than ever before. The act also fulfills one of the President’s key campaign promises to make homeownership accessible to renters who seek it for themselves and their families, especially in historically marginalized communities.

What is a Homebuyer Tax Credit?

It’s important to know that homebuyer tax credits are not a loan to be repaid nor a cash grant. The tax credit is applied directly to your federal tax bill.

According to homebuyer.com, married households who file their taxes separately may claim half of the available credit, non-married buyers may claim their proportional share of the credit.

Assuming a 2 percent inflation rate, the maximum first-time homebuyer credit would increase over the next five years:

  • 2021: Maximum tax credit of $15,000
  • 2022: Maximum tax credit of $15,300
  • 2023: Maximum tax credit of $15,606
  • 2024: Maximum tax credit of $15,918
  • 2025: Maximum tax credit of $16,236

How is the 2021 First-Time Homebuyer Act different from the one in 2008?

In 2008, the federal government under President Barack Obama offered first-time homebuyers a tax credit of $7,500 in 2008 and eventually $8,000 in 2009 and 2010 with the Housing and Economic Recovery Act (HERA). Obama’s acts were created amidst the 2008 housing market crash. Unlike the housing market in 2008, Biden’s act comes in during a massive housing market bubble – that’s doesn’t appear to be crashing anytime soon.

The difference is not only the amount of tax credit but also that people who received credit in 2008 were required to pay the credit back over time.

What are the requirements for Biden’s Tax Credit?

To be eligible, a person must be a first-time homebuyer or not have owned/purchased a home in the past three years. Their incomes must also be at or below 160% of their area’s median income in addition they must be purchasing the home at or below 110% of their area’s median purchase price.

You must also be 18 years or older.

Downpayment Toward Equity Act of 2021

The Downpayment Toward Equity Act and First-Time Homebuyer Act of 2021 are the first steps towards sustainable development and solving our nation’s housing crisis. Separate from the First-Time Home Buyer Act, another act is in the works to help individuals achieve homeownership.

The Downpayment Toward Equity Act of 2021 promises to give Americans direct financial assistance to help them buy quality housing by providing $25,000 in cash to purchase a new home. The bill states its goal is to provide down payment assistance to first-generation home buyers to address multi-generational inequities in access to homeownership, and narrow and ultimately close the racial homeownership gap in the United States, and for other purposes.

Who is eligible?

People eligible for the Downpayment Toward Equity Act must be:

  • First-time home buyers
  • First-generation home buyers, or have lived in foster care
  • Earned income that’s above-average for an area, at most
  • Use Fannie Mae, Freddie Mac, FHA, VA, or USDA loans

To learn more about the rules and regulations regarding the Downpayment Toward Equity Act, read the bill in its entirety here.

The Future of Homeownership

Fair housing is something we care about greatly at 828 Real Estate. We’re always here to help first-time homebuyers find where to start in the buying process. The future of homeownership is now!

About the Author
I am a native of Knoxville, Tennessee, but I have been in North Carolina since1997 when I moved to Boone to attend Appalachian State University. I earned my degree in Theatre Education and Communications. While at ASU I met my husband, Matt Long, a Boone native and general contractor, and gained a heart for these mountains and my beloved ASU Mountaineers. After graduation, I spent 5 years teaching in Charlotte before being given the opportunity to move back to the High Country. In 2007 I earned my NC Real Estate License and began in full-time brokerage. In 2010 I helped to open a franchise brokerage in the High Country. I gained impactful knowledge and built important relationships during my 8 years there, but began to feel the calling to get back to my roots.

In June of 2018, my dream became a reality when I opened 828 Real Estate. We are a boutique brokerage that is locally focused, community-minded and client-driven. I feel so fortunate to be in a career that I love, have opportunities to serve wonderful clients, and get to work with the best team here at 828 Real Estate.

I am a member of The High Country Association of Realtors, the North Carolina Association of Realtors, the National Association of Realtors. I am a member the Boone Chamber of Commerce and I am on the board for the Downtown Boone Development Association. I have also completed the Realtor  e-Pro certification that specifically focuses on the technology tools needed in the purchase or sale of a property. Additionally, I have earned my CLHMS Designation. (Certified Luxury Home Marketing Specialist) and a qualified LuxuryHomes.com Affiliate. Over the years I have been awarded various Top Producer Awards. I am honored each year to be invited to the Top 50 Brokers in the High Country celebration.

My husband and I reside in downtown Boone and have 2 beautiful children, Sadie Rose and Levi. We attend Alliance Bible Fellowship and stay connected by serving the community and supporting local non-profits like Western Youth Network, The Appalachian Theatre and Valle Crucis Community Park. We love to spend time outside hiking, playing on the river, running with their dog, Emmie Lou, hitting the slopes and making the most of our time in this amazing place we get to call home!