First Home Affordability Act
Sponsored By: Representative Rep. Krishnamoorthi, Raja [D-IL-8]
Introduced
Summary
Creates a refundable First-Time Homebuyer Tax Credit that would help eligible first-time buyers cover part of a home purchase. The credit links eligibility to local area income and price limits and allows lenders to buy and advance the credit to borrowers.
Show full summary
- Families and first-time buyers would be eligible for a refundable credit equal to 2% of the purchase price, with a typical cap of $25,000 and a $12,500 cap for married individuals filing separately. The credit generally applies across a five-year period beginning in the purchase year.
- Teachers, childcare workers, and first responders would get a special rule that makes the credit payable in the purchase year and sets the applicable amount at 10% of the purchase price.
- Lenders could elect the credit, must register and disclose amounts, and can receive advance payments through a Treasury program. The bill includes recapture rules that reclaim part of the credit if the home is sold or stops being a principal residence during the credit period and adds reporting and math-error checks to limit improper claims.
Your PRIA Score
Personalized for You
How does this bill affect your finances?
Sign up for a PRIA Policy Scan to see your personalized alignment score for this bill and every other piece of legislation we track. We analyze your financial profile against policy provisions to show you exactly what matters to your wallet.
Bill Overview
Analyzed Economic Effects
2 provisions identified: 0 benefits, 0 costs, 2 mixed.
Refundable first‑time homebuyer credit
If enacted, you would be able to claim a refundable First‑Time Homebuyer Credit equal to 10% of your purchase price spread over five years (about 2% a year). The credit would be capped at $25,000 per purchase ($12,500 if married filing separately). You would have to be a first‑time buyer at least age 18, buy a principal residence financed with a federally backed mortgage, and not buy from a related person. The credit would be reduced when your modified AGI is over 150% of the area median income or when the purchase price is above 110% of the area median purchase price, and it could be fully lost past those phaseouts. If you sell or stop using the home during the five‑year period, you would generally have to repay part of the credit (25% times remaining years), though specified exceptions apply. Dollar limits would be indexed for inflation for tax years starting after 2025.
Option to get credit as cash at closing
If enacted, you would be able to elect by the purchase date to have an eligible mortgage lender claim your credit and pay you the credit amount at or before closing. Lenders would have to register with the Treasury/IRS, disclose the credit value and any payment, and would be eligible for Treasury advance payments covering elected credits. The payment to you would not be taxable income, and lenders could not deduct that payment. Recapture and the credit's other rules would still apply to purchases where the lender claimed and paid the credit.
Free Policy Watch
You just read the policy. Now see what it costs you.
Pick a topic. PRIA runs your household against live legislation and sends you a free personalized readout.
Pick a topic to get started
Sponsors & CoSponsors
Sponsor
Rep. Krishnamoorthi, Raja [D-IL-8]
IL • D
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
View on Congress.govTake It Personal
Get Your Personalized Policy View
Take the PRIA Score to see how policy affects your household, then upgrade to PRIA Full Coverage for year-round monitoring.
Already have an account? Sign in