After President Biden called for a new federal tax credit to support first-time home buyers in his State of the Union Address, the First-Time Homebuyer Tax Credit Act was introduced in the House and Senate on March 13.

Sponsored by Sens. Sheldon Whitehouse (D-R.I.) and Martin Heinrich (D-N.M.) and by Reps. Jimmy Panetta (D-Calif.) and Earl Blumenauer (D-Ore.), the legislation would create a refundable tax credit up to $15,000 for first-time home buyers. Buyers would have the option of claiming the credit at closing through their mortgage lender, which would help alleviate one of the biggest barriers for first-time buyers: accumulating enough savings to cover the initial costs of buying a home.

The credit phases out for those making above 150% of area median income and for those buying a house with a purchase price above 110% of the area median purchase price. Additionally, the credit is limited to home purchases financed through federally backed mortgages.

NAHB has endorsed this legislation, and while its fate is uncertain, NAHB welcomes the congressional focus on the challenges facing home buyers today. In addition to supporting tax incentives focusing on the unique challenges of a first-time buyer, NAHB strongly believes Congress should holistically look at how the tax code incentivizes homeownership for first-time buyers as well as existing home owners and move up buyers such as young families.