Bicameral First-Time Homebuyer Tax Credit Act would help make homeownership a reality for young Americans amidst skyrocketing housing costs
Washington, DC – U.S. Senators Sheldon Whitehouse (D-RI) and Martin Heinrich (D-NM) today led 13 Democratic Senators in reintroducing the First-Time Homebuyer Tax Credit Act, legislation that aims to support middle-class Americans purchasing their first home. The bill would establish a refundable tax credit worth up to 10 percent of a home’s purchase price – up to a maximum of $15,000 – for first-time homebuyers.
The First-Time Homebuyer Tax Credit Act is cosponsored by U.S. Senators Peter Welch (D-VT), Tammy Baldwin (D-WI), Jack Reed (D-RI), Tina Smith (D-MN), Jacky Rosen (D-NV), Richard Blumenthal (D-CT), Chris Van Hollen (D-MD), Lisa Blunt Rochester (D-DE), Andy Kim (D-NJ), Ruben Gallego (D-AZ), and Angela Alsobrooks (D-MD). Congressmen Jimmy Panetta (D-CA) and Mike Thompson (D-CA) led the reintroduction of the legislation in the House of Representatives.
“Owning a home is at the core of the American dream, but too many young families have been priced out of homeownership in recent years because of the housing supply crunch. And Trump’s chaotic tariff regime has increased homebuilding costs, forcing developers to pause construction on much-needed new units,” said Senator Whitehouse. “Our tax credit for first-time homebuyers would help make the American dream a reality for more of the young Americans left behind in Trump’s billionaire-first economy.”
“Buying your first home is more than just owning property: It’s a source of pride, stability, and hope for the future. Unfortunately, buying a home is out of reach for many families right now. We’re changing that with my First-Time Homebuyer Tax Credit Act,” said Senator Heinrich. “I’m proud to reintroduce this bill to ease the financial burden on aspiring homeowners and give every working family an equal opportunity to realize the American dream of owning a home.”
“The affordability issue is hitting all of us in one way or the other and the lack of affordable housing is a cornerstone of that problem,” said Rep. Panetta. “Our legislation would target that issue by providing qualifying first-time homebuyers with a $15,000 tax credit toward the purchase of a new home. The First-Time Homebuyer Tax Credit Act is a practical and essential step toward addressing housing affordability by incentivizing and investing in the American Dream of home ownership.”
“Our housing crisis is simply unsustainable,” said Rep. Thompson. “Only seventeen percent of Californian families can afford to purchase a median-priced home. Low- and middle-income Americans are being priced out of homeownership and with it, they are being locked out of the American dream. It’s well past time Congress help level the playing field. I’m glad to work with Representative Panetta and Senators Heinrich and Whitehouse to introduce the First Time Homebuyer Tax Credit Act of 2025 to promote housing stability and help every American build generational wealth.”
“For too many Wisconsinites, the American dream of owning a home is out of reach. As we see housing costs skyrocket across our state, we need to do more to make sure working families can afford a home and put down roots in the communities they love,” said Senator Baldwin. “I am proud to work with my colleagues to introduce this bill that will give a tax cut for families buying their first home and help more hardworking Wisconsinites chart the path to a stable, middle-class life.”
“Everyone should have a fair chance to experience the joy of buying their first home–it’s a pillar of the American Dream. But skyrocketing housing prices have pushed that dream out of reach for folks in red and blue states alike,” said Senator Welch. “Our legislation will provide a financial boost to first-time homeowners to give more hardworking Americans a fair shot at buying their first home.”
“Facilitating affordable home-ownership is one of the best ways to enhance economic stability for families and help boost the middle-class. This bill would help more first-time homebuyers clear that initial hurdle and responsibly incentivize neighborhood and community stability,” said Senator Reed.
“Buying a home is a dream of countless Americans,” said Senator Smith. “However, the cost of housing is simply unaffordable and out of reach for far too many working Americans. The First-Time Homebuyer Tax Credit Act is an important step in making sure more working Americans can start to build generational wealth and help prospective homeowners achieve long-lasting stability for themselves and their children.”
“Buying a home was once a common milestone for American families, but today that goal is out of reach for far too many. Tackling the dire housing affordability crisis that we face in this nation requires comprehensive solutions – and this bill is one key step we can take to help first-time buyers unlock their dream of homeownership,” said Senator Van Hollen.
“The Trump Administration’s reckless policies are raising housing costs across the board and making it more difficult for hardworking Nevadans to achieve the American Dream,” said Senator Rosen. “I’m proud to help introduce a bill to help lower costs and make it easier for first-time homebuyers to afford a down payment. I’ll keep fighting to lower housing costs for hardworking families in our state.”
“Owning a home is a cornerstone of the American dream. But for too many hardworking families, that dream is out of reach,” said Senator Gallego. “First-time homeowners deserve a break, and this bill gives it to them. I’m proud to introduce it with my colleagues and help the next generation of homeowners make their start.”
“My parents were able to buy their first home after five years of marriage. Now, for most Americans, the dream of home ownership is far out of reach. What’s more is the vast majority of Americans believe that home ownership is one of the best ways to build wealth in this country. They’re right. We need to be laser focused on creating pathways to wealth in this country so that every American can build something for their families. Lowering the cost of housing is one of the best ways to do that, and that’s why we need to pass our First Time Homebuyer Tax Credit Act,” said Senator Alsobrooks.
“Buying a home is more than just having a roof over your head; it’s about obtaining a part of the American dream,” said Senator Blunt Rochester. “For too many people, the dream of homeownership is out of reach. That is why we are fighting to lower the cost of housing and ensure more Americans have the opportunity to buy a house. I am proud to be joining my colleagues to introduce the First-Time Homebuyer Tax Credit Act. Together, we will ensure that more Americans can have a place to call home.”
“The hope and economic promise of home ownership is worth fighting for,” said Senator Kim. “We need to take actions to make it more affordable for every American, and this tax credit would harness that hope and unlock a path to the American dream of owning a home for so many who have never had one before.”
“There is nothing like the pride of buying your first home. Home ownership is stagnating and even decreasing in Connecticut and across the country, making this proposal to support first-time buyers both necessary and timely,” said Senator Blumenthal. “Connecticut’s “Time to Own” program has already put thousands of families on the path to home ownership and a federal program like this could help even more. I’m proud to sponsor legislation that will make this cornerstone of the American dream a reality for Connecticut families.”
In 2022, the median sale price for a home in the U.S. was 5.6 times higher than the median income, a higher ratio than during the years immediately before the 2007 mortgage crisis, and the highest disparity on record. An NBC News analysis earlier this month found that the cost of building a single-family home could soon rise by more than $4,000 thanks to President Trump’s tariff agenda, which is expected to increase the costs of many of the materials used to build houses.
In Rhode Island, which has the third-most competitive housing market in the country, there are currently no communities where families earning the state’s median income can afford to buy a typical home. Nationwide, the shortage of affordable housing opportunities costs the American economy an estimated $2 trillion each year. High housing costs reduce disposable income and economic mobility, stifling economic opportunities for those who can no longer afford housing in their communities.
Housing unaffordability is uniquely harmful to younger Americans, who are struggling to reach the same milestones their parents did at their age. In 2024, the typical age of a first-time homebuyer reached a record high of 38, up from 29 in 1981. And first-time homebuyers, as a percentage of all homebuyers nationwide, fell from 38 percent to 24 percent over that same period, the lowest percentage ever recorded.
Under the First-Time Homebuyer Tax Credit Act, taxpayers would have the option of receiving the credit at the time of purchase by working with their mortgage issuer. Alternatively, taxpayers could elect to treat the purchase of their home as occurring in the prior taxable year to receive the credit before tax season if they are unable to qualify for the credit at point of sale.
The credit phases out for those making above 150 percent of area median income and for those buying a house with a purchase price above 110 percent of the area median purchase price. Additionally, the credit is limited to home purchases financed through federally backed mortgages.
The legislation is endorsed by the National Association of REALTORS, National Association of Home Builders, Cooperative Credit Union Association, Mortgage Bankers Association, Rhode Island Executive Office of Housing, Rhode Island Association of REALTORS, RIHousing, Housing Network of Rhode Island, HousingWorksRI, Rhode Island Builders Association, Rhode Island Mortgage Bankers Association, Santa Clara County REALTORS, Santa Cruz County REALTORS, and Monterey County REALTORS.
“For too many people across the country—including right here in Rhode Island—even modest starter homes have slipped out of reach,” said Rhode Island Secretary of Housing Deborah Goddard. “Senator Whitehouse’s push to reintroduce the First-Time Homebuyers Tax Credit is a crucial step toward making homeownership possible again for Rhode Islanders. By providing the financial support needed to compete in today’s housing market, this bill helps restore access to one of the most important foundations of economic stability: a home of your own.”
“As we continue to navigate a difficult housing market, the ability to purchase a home and build equity remains out of reach for many families across the country, including in Rhode Island,” said Carol Ventura, CEO and Executive Director of RIHousing. “With a shortage of housing and rising home costs, federal support is critical. The First-Time Homebuyers Tax Credit Act would add another valuable tool for these families in achieving their dreams of homeownership.”
“As home prices escalate beyond what typical wages can support, the dream of homeownership is out of reach for more and more Rhode Islanders, many of whom lack the financial resources to meet down payment requirements. This is particularly true for low- and middle-income earners, who are being increasingly priced-out of that dream. Programs such as the proposed First-Time Homebuyers Tax Credit Act are critical pieces of the puzzle to ensure that households who are ready to become homeowners have access to the one-time resources they need to bridge these real hurdles,” said Melina Lodge, Executive Director, Housing Network of RI.
The full text of the bill is available here.
