Joe Biden's First-Time Homebuyer Credit: Where We're At

One of President Joe Biden's campaign promises was a tax credit worth up to $15,000 for first-time homebuyers.

Biden's First Down Payment Tax Credit "will help families offset the costs of homebuying and help millions of families lay down roots for the first time," his campaign website stated.

It would build off a temporary tax credit included in the 2008 Housing and Economic Recovery Act, but this one "will be permanent and advanceable, meaning that homebuyers receive the tax credit when they make the purchase instead of waiting to receive the assistance when they file taxes the following year."

Earlier in 2021, false reports on social media suggested that Congress had approved a $25,000 tax credit for first-time homebuyers.

While lawmakers have in fact floated two bills aiming at helping people purchase homes through tax credits or down-payment assistance, neither has yet advanced to a vote.

The First-Time Homebuyer Act

Reps. Earl Blumenauer and Jimmy Panetta introduced the First-Time Homebuyer Act in the House in late April.

The bill, which closely resembles what Biden proposed during his campaign, would create a refundable tax credit worth up to 10 percent of the purchase price, or $15,000, for the purchase of a home.

To be eligible, the person must be a first-time buyer or not have owned or purchased a home in the past three years. They must also have incomes at or below 160 percent of their area's median income, and be purchasing a home at or below 110 percent of their area's median purchase price.

"As housing prices and demand continue to rise to historic levels, we need to do more to create opportunities for those who've been locked out of homeownership by creating incentives for first-time homebuyers," Blumenauer said in a statement announcing the bill's introduction.

A press release noted that such a tax credit has been proven to help first-time buyers. The temporary tax credit included in the 2008 Recovery Act during Barack Obama's administration was claimed by nearly 1.5 million households, it said.

The Downpayment Toward Equity Act of 2021

This proposed bill would issue grants worth up to $25,000 for down payments through the U.S. Department of Housing and Urban Development, instead of as a tax credit.

To qualify, individuals must meet income requirements and be "first-generation" home buyers, according to a summary of the bill's discussion draft by the National Council of State Housing Agencies (NCSHA).

The act's definition of a "first-generation" homebuyer includes anyone whose parents or guardians have never owned their own home during the home buyer's lifetime, or previously owned a home, but lost it due to foreclosure or other financial issues.

The cash grants would be for up to $20,000, but those who qualify as "socially and economically disadvantaged" would be eligible for $25,000.

The Down Payment Toward Equity Act of 2021 remains in draft form and hasn't been introduced as an actual bill in Congress.

Joe Biden returns from Illinois
US President Joe Biden walks on the South Lawn while returning to the White House on July 7, 2021, after traveling to promote his economic plans in Illinois. Nicholas Kamm/AFP via Getty Images