There are always many options to help you buy a home! If you are worried…
Proposed Legislation Could Provide BIG Help for New Home Buyers
Buying a home is no small task, especially if it’s your first time. Yet, recently proposed legislation signals that help for new home buyers may be closer than you think.
Currently, there are three distinct pieces of national legislation aimed at helping first-time and first-generation homebuyers achieve the American dream by removing the financial barriers to owning a home.
The proposed bills include the Decent, Affordable, Safe Housing for All Act (DASH), the Down Payment Toward Equity Act of 2021, and the First Time Home Buyer Act of 2021. Please note that these bills are still in development and could change once they move closer to becoming law.
The DASH Act
In its current proposed form, the DASH Act would seek to provide a $15,000 tax credit to first-time buyers. Unlike some existing programs, this legislation is intended for those who have never owned a home before.
Let’s look at the proposed eligibility requirements:
- The home you’re buying must be lived in as your primary residence.
- Individual buyers cannot earn more than $100,000 a year.
- First-time buyers filing their taxes as head of household cannot earn more than $150,000 a year.
- Jointly filing first-time buyers cannot earn more than $200,000 a year in total.
Additionally, there’s a five-year taxable holding period, meaning you must personally live in the property you’re buying for at least five years. If you move or sell the property during that period, you would be obligated to repay the tax credit.
Each year the property is held during those five years decreases the potential amount owed, should you sell or move.
Here’s an example:
If you were to move after the first year of living in a property acquired through this program, you would owe 20% less of the $15,000, which would amount to $12,000.
Should you sell or move four years into the five-year taxable holding period, you’d owe $2,000.
Remember that these funds are administered in the form of a tax credit, meaning you’d receive it when filing your next year’s tax returns.
If you’re not willing to wait in the hopes that a beneficial law will be passed, we have plenty of options for you to buy a home with little-to-no money down.
The Down Payment Toward Equity Act of 2021
We know that a down payment is typically cited as a barrier to entry, which could make this legislative proposal a serious form of help for new home buyers.
This legislation proposes giving first-time buyers a possible total grant of $25,000 of down payment assistance towards the home’s purchase price.
This proposal is not a tax credit! Instead, the funds would be available to eligible buyers when closing on their property.
Here’s what the bill is currently striving to achieve:
- $20,000 of down payment assistance in the form of a grant
- An additional $5,000 in assistance for “socially disadvantaged” individuals, as determined by racial and-or ethnic status or other verifiable circumstances
The grant is currently being discussed for individuals who have not owned or purchased a home in the past three years and meet certain income requirements. Check back for more details on what the final version of this proposal could mean for you and your family.
The First time Home Buyer Act of 2021
Similar to the DASH Act, this legislation seeks to provide $15,000 in down payment assistance, or 10% of the purchase price, to help renters close the wealth gap associated with homeownership.
The money would be distributed in the form of a tax credit when filing your taxes for the upcoming year. Details are still being worked out, and additional perks or restrictions may be applied when determining your filing and purchasing eligibility.
Contact one of our loan officers to discuss these developments, along with other resources we have to help you move into a home with no money down.
Ready to get home?
If you’re exploring what options exist to provide financial help for new home buyers, know that we’re following these laws closely. Our team is always monitoring ways to make homeownership possible for people at all stages of life.
In the meantime, we strongly recommend getting a head start on your home buying journey by grabbing a free copy of our e-guide, Things To Consider When Buying a Home.
Ready to find out exactly what you qualify for? Start by visiting our website now.