Looking for the first-time home buyer tax credit? You may be thinking of the federal program implemented under the Obama administration. We hate to be the bearer of bad news, but it doesn’t exist anymore.
However, don’t despair: Other programs can help you get a first mortgage.
To learn where else you can turn to get help now for a first mortgage, and what happened to the first-time home buyer tax credit, read on.
Programs for first-time buyers
Although the federal tax credit is no longer available, other first-time home buyer programs can make it more affordable to buy a home. The programs are typically offered by states, counties and cities, and may include zero-interest loans, grant money to put toward a down payment, and tax credits.
Here’s an example of a first-time home buyer program in Texas: The Texas State Affordable Housing Corporation offers two programs for first-time buyers — one for home buyers with low and moderate incomes, and one for teachers, firefighters and Emergency Medical Services personnel, police, correctional officers and veterans.
In California, you can apply for closing cost and down payment assistance and don’t have to pay back the deferred loan until the home is sold, refinanced or paid off.
To find available assistance that could help with the purchase of your first home, click on your state in our first-time home buyer program resource.
Note that some programs have a maximum on income and property value in order to benefit lower-income buyers, and others require several hours of home buyer counseling classes to qualify. Also pay close attention to whether you’re required to repay the financial assistance or if it’s being gifted to you.
The first-time home buyer tax credit
In 2008, the Housing and Economic Recovery Act sought to encourage Americans to purchase homes by creating a tax credit worth up to $7,500 for first-time buyers. The next year, Congress increased the amount to $8,000. After that, the legislation changed a few more times, so depending on when you bought your home, the credit was either a true tax credit gifted to you, or it was essentially an interest-free loan that had to be repaid.
The tax-credit program ended in late 2010. While some people who bought homes before then can still claim the credit, Americans buying houses now cannot.