On the campaign trail, President Biden ensured his supporters that housing affordability would be a key part of his domestic policy. For aspiring home buyers, the most important provision would incentivize home buying at the national level, the same way many states and local governments have.
As a candidate, Biden proposed a $15,000 first-time home buyer tax credit. However, now that this measure has been introduced and debated in both houses of Congress, there are several different versions and approaches of home buyer support. Here’s the latest on each and what they might mean for home buyers. Neither plan has been ratified or implemented yet, we will update this with more information as things develop.
Downpayment toward Equity Act of 2021
This bill, currently in the Senate, would pay first-time first-generation home buyers up to $25,000 towards down payment and closing costs for a new house. There are a few catches though: homebuyers must meet income requirements, use a government-backed loan, and be a member of a traditionally disadvantaged group to get the full $25,000.
If you fit this description and you’re planning on buying a home soon, then you’re in luck. This bill is yet to be enacted, but if it is, it represents a significant increase in purchasing power available once you qualify for a mortgage.
Decent Affordable Safe Housing (DASH) for all Act of 2021
This bill, also currently in the Senate, would provide a $15,000 tax credit to all first-time home buyers. This tax credit, which represents 20% of the purchase price of the home, capped at $15,000, phases out based on income limits and home value by region. If this credit is more than your tax liability, you receive the difference as a rebate.
This bill applies to significantly more aspiring home buyers, but isn’t as good as money in your pocket. If you’re a first time home buyer and you’re planning on buying a home soon, you will be able to use this credit to offset your closing costs, and potentially plan for a lump sum around tax time.