First-Time Homebuyer Tax Credit Act of 2025
Sponsored By: Senator Sen. Whitehouse, Sheldon [D-RI]
Introduced
Summary
A refundable first-time homebuyer tax credit would give qualifying first-time buyers a tax credit based on their purchase price, shaped by local income and price limits and subject to recapture rules.
Show full summary
- Families and buyers: First-time purchasers age 18 or older would get a refundable credit equal to 10 percent of the purchase price, capped at $15,000 per home. The credit phases down based on local area median income and home price thresholds.
- Lenders and markets: Buyers could elect to transfer the credit to their mortgage lender. Registered lenders must disclose the credit value, pay the purchaser the credit amount, and may tap an advance payment program for eligible loans.
- Compliance and recapture: The credit would have a four-year recapture period. Recapture increases tax by 25 percent of the credit for each remaining year, with exceptions for death, qualifying military service, involuntary conversions with timely replacement, transfers incident to divorce, and certain job-related moves.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 2 benefits, 2 costs, 0 mixed.
Option to get credit at closing
The bill would let you elect to let your mortgage lender take the credit instead of you. If you elect this, the lender must give you the credit amount at purchase in cash or toward your down payment. Lenders would need to register with the Secretary and follow disclosure rules. The Secretary could advance payments to eligible lenders to cover these transfers. Homes with such advances would still face the same recapture rules.
Tax credit for first-time buyers
This bill would create a refundable credit equal to 10% of your home's purchase price. The credit would be capped at $15,000, or $7,500 for married filers filing separately. After 2025, those caps would rise with inflation using 2024 as the base and rounded to $100. If your income is above 150% of local AMI, the credit would shrink by a set formula. If the price is above 110% of the area's median purchase price, the credit would also be reduced by a formula. For purchases after 2023, you could elect to treat the purchase as made on December 31 of the prior year for timing.
Repayment rule if you sell
If enacted, you would have to repay part of the credit if you sell or stop living in the home within four years. Repayment would equal 25% of the credit times the number of years left in the four-year window. If you sell to an unrelated buyer, recapture could not exceed the gain on the sale. There are exceptions for death, certain involuntary conversions, transfers between spouses, and some military or job-related moves.
Eligibility and reporting for buyers
The bill would limit who counts as a first-time buyer to those with no ownership in the prior three years. Purchases must be financed with a federally backed mortgage. You must be at least 18 on the purchase date. The IRS could require sellers and other parties to report information to verify claims. The IRS could treat some credit claims as math or clerical errors if paperwork is missing or records conflict.
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Sponsors & CoSponsors
Sponsor
Sen. Whitehouse, Sheldon [D-RI]
RI • D
Cosponsors
Sen. Heinrich, Martin [D-NM]
NM • D
Sponsored 7/23/2025
Peter Welch
VT • D
Sponsored 7/23/2025
Sen. Smith, Tina [D-MN]
MN • D
Sponsored 7/23/2025
Sen. Reed, Jack [D-RI]
RI • D
Sponsored 7/23/2025
Sen. Baldwin, Tammy [D-WI]
WI • D
Sponsored 7/23/2025
Jacky Rosen
NV • D
Sponsored 7/23/2025
Richard Blumenthal
CT • D
Sponsored 7/23/2025
Chris Van Hollen
MD • D
Sponsored 7/23/2025
Rep. Blunt Rochester, Lisa [D-DE-At Large]
DE • D
Sponsored 7/23/2025
Andy Kim
NJ • D
Sponsored 7/23/2025
Sen. Gallego, Ruben [D-AZ]
AZ • D
Sponsored 7/23/2025
Sen. Alsobrooks, Angela D. [D-MD]
MD • D
Sponsored 7/23/2025
Sen. Luján, Ben Ray [D-NM]
NM • D
Sponsored 7/28/2025
Roll Call Votes
No roll call votes available for this bill.
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