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The First-Time Home Buyer Tax Credit: 2019

The federal first-time home buyer tax credit is no longer available, but many states offer tax credits you can use on your federal tax return.
July 29, 2019
Finding the Right Mortgage, Mortgages
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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: There are tax credits available, as well as other programs that can help you get a first mortgage.

» MORE: Tips for first-time home buyers

Where to find first-time home buyer credits

Although the federal tax credit is no longer available, it’s quite likely you’ll find tax credits as part of a first-time home buyer program offered by your state. And it gets even better. In addition to tax credits, these programs often offer zero-interest loans and grant money to put toward a down payment.

Here’s an example of a first-time home buyer program in Texas: The Texas State Affordable Housing Corporation offers mortgage tax certificates that allow you to deduct a healthy portion of the mortgage interest you pay on your annual federal tax return. If you qualify, you might even be able to combine that tax break with down payment and closing cost assistance.

Another: The Florida mortgage credit program offers a similar tax advantage and offers low down payment loans and grants of up to 3% of the home’s purchase price to apply to that down payment.

To find other federal tax credits and assistance that could help with the purchase of your first home, click on your state in our list of first-time home buyer programs.

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. A small price to pay for free money, don’t you think?

Also, pay close attention to whether you’re required to repay the financial assistance or if it’s being gifted to you.

» MORE: Learn about other first-time home buyer loans and programs

The federal 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.

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