Not many people can afford to buy their own homes. This is the truth that many of us are facing, especially those just buying a house for the first time. For whatever reason, may it be due to lack of financials or an ever-elusive mortgage approval due to low-income conditions, many of us are still renting our space, struggling to make ends meet while grasping to the dream that we may one day own a house.
The good news is, this dream of ours may become a reality sooner than we expected, as Rep. Earl Blumenauer and Rep. Jimmy Panetta recently announced a bill that may make purchasing a house more accessible to everyone.
What Is the First-Time Homebuyer Act?
It is a bill that aims to grant a tax credit of up to 10% to the purchase price of a home, equivalent to $15,000 for first-time buyers. That itself is already an excellent deal for most people who may have a hard time reaching for their dream homes.
How Can I Be Qualified for the First-Time Homebuyer Tax Credit?
As with other bills and laws, specific requirements have to be met before you can even be eligible for its featured benefits. The following are some examples of the first-time buyers’ act’s prerequisites.
- It requires you not to have owned a home for the past three years or so.
- It requires your modified adjusted gross income to not exceed 160% of the area’s median income during the tax year that you’re claiming the credit in.
- It requires you to purchase a house whose price must not exceed 110% of the local median home price.
- It needs your home loan to close after December 31, 2020.
- It requires the buyer and tax credit recipient to remain in the purchased house for at least four years; otherwise, they will have to pay back a portion of the credit.
The bill has yet to be finalized, so feel free to search up on its technicalities from time to time to determine whether or not these requirements were changed or not.
Are There Other Technicalities I Should Know About the First-Time Homebuyer Act?
You should know that you will only be able to claim the credit when you file your taxes for the year you had purchased the house. Take this for example: if you bought the house this year, you would be able to receive the credit when you file your taxes next year, around April 15, 2022. In relation to this, the tax credit proposed in the bill is refundable, which means that you may be able to receive the $15,000 amount, even if it exceeds what you owed in taxes for that year.
The first-time homebuyer act may finally be the long-awaited miracle that many aspiring homeowners are hoping for. While countless home loan options out there are formulated to assist low-income individuals in buying their own house, the addition of this new bill further makes it easier and more accessible for everyone to acquire their dream home.
Although it hasn’t really been finalized yet, you should prepare all the necessary paperwork as early as now to ensure that you’ll not be left behind once it is implemented.
You may be an aspiring homeowner who wishes to buy your own house as well. If so, we at Desert Springs Mortgage offer you the best home loans in Phoenix. We are a full-service mortgage brokerage focusing on the purchase market through realtor partnerships and outstanding customer service. Contact us at (623) 432-1309 to learn more!