Bill > HR7160

This bill, titled the "First Home Affordability Act," establishes a new refundable tax credit for first-time homebuyers. An eligible individual is defined as someone who hasn't owned a home in the three years prior to purchasing a principal residence in the United States and hasn't used this credit before. The credit is generally calculated as 10% of the home's purchase price, divided by five, with a maximum credit of $25,000 per purchase, though this is reduced to $12,500 for married individuals filing separately. The credit amount is subject to a phase-out based on the taxpayer's modified adjusted gross income (AGI) compared to 150% of the Area Median Income (AMI) for the home's location and household size, and also reduced if the purchase price exceeds 110% of the area median purchase price. The credit period is five years, but for first responders, childcare workers, and teachers, the credit is available for the year of purchase and is 10% of the purchase price. The bill also includes provisions for recapture of the credit if the home is sold or ceases to be a principal residence within the credit period, with exceptions for death, involuntary conversion, transfers between spouses, military orders, and certain job changes. Notably, eligible first-time homebuyers can elect to transfer this credit to their mortgage lender, who must then provide an equivalent reduction in the loan amount or down payment, and the lender may receive advance payments from the government for these credits. The bill also clarifies that certain errors related to this credit, such as not meeting the age requirement or providing inconsistent income information, can be treated as mathematical or clerical errors by the IRS. These amendments apply to principal residences purchased after the bill's enactment.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/7160/all-info