Did you know that the federal first time home buyer act set forth under the Obama administration in 2008 is no longer in effect? Because of its aid towards new homebuyers during the financial crisis, many people are still looking for something similar to help with taxes after buying a home.
Luckily, there are some options still available to you as a first-time homebuyer. One such option is what’s called first time home buyer credit.
Want to learn more? Keep reading for additional information.
State-Specific First Time Home Buyer Credit
Despite the removal of the act in 2010, there are still tax credits you can earn as a first time home buyer. These are generally a part of the program held by your state and usually offer zero-interest loans.
These programs are an excellent way to help new home buyers get the house of their dreams, as they can help cover the costs of buying a home for the first time. These costs are quite high, as you might know, so any extra help is great. Some states may even offer grants to assist with down payments for your new home.
These benefits differ depending on which state you’re in. It’s a good idea to look up your state’s specific homebuyer assistance program and get affiliated with the information provided.
If you’re looking to buy the perfect home in Alexandria, VA, contact our friends over at the Liz & Luke team for individual assistance.
Other Mortgage Assistance Programs
Additional assistance programs are available to you depending on your area. If it’s your first time buying a home, The Department of Housing and Urban Development (HUD) has several loans and grant options that can make the process much easier.
You can also get a mortgage credit certificate (MCC) from the IRS. These are generally reserved for low-income to middle-income first time home buyers, and they are a great way to use your home to deduct taxes!
The IRS might also allow you to take up to $10,000 from your IRAs (either traditional or Roth) to funnel towards your new home. You’ll still be required to pay the withdrawal fee, but the 10% early penalty is nullified.
The First Time Home Buyer Act of 2021
Here’s something that might interest you!
In April 2021, a bill arrived at Congress that sought to reintroduce the 2008 bill, with the same requirements. There was one new addition to this bill though, that being that certain home buyers would be granted a tax credit for up to 10% of their home’s purchase price. The maximum amount is $15,000.
This bill was introduced by Democratic members of Congress with the intention to generate more wealth in communities with diverse populations.
The bill has yet to be signed, but keep an eye out for it. To learn more about the requirements for the bill, please visit here.
Additional Tax Deductions After Buying a Home
Listed below are some more ways you can save money after buying a new home.
- Mortgage Interest Deductions (up to $750,000)
- Property taxes
- Insurance premiums from mortgage insurance
Check with your state to see which applications and to what amount you can claim.
More Home Buying Tips
So while there is no longer a first time home buyer credit program, there are still plenty of ways to get credits that can save you money. There’s also the new 2021 bill that’s up in the air, so keep an eye out for the decision made on that.
Need some more house-hunting or home buying tips? Head on over to the finance section of our blog for more information!