In a time when many would-be home buyers find themselves priced out of the market, the prospect of a helping hand from the federal government might seem like a welcome surprise. The Biden First-Time Home Buyer Tax Credit could help some Americans make their dream of homeownership a reality.

The proposed tax credit offers some financial relief to households looking to buy in this challenging housing market. While this proposed tax credit could help you become a homeowner, it’s not the only way to make this dream a reality.

Let’s explore what the Biden First-Time Home Buyer Act is and your other options.

Check your home buying eligibility. Start here (Dec 16th, 2025)

What is the Biden First-Time Home Buyer Act?

The Biden First-Time Home Buyer Act, also known as the First-Time Home Buyer Tax Credit, was originally proposed by the Biden administration in 2021. If the idea became a reality, it would allow first-time home buyers to enjoy a tax credit of up to 10% of their home’s purchase price, with a maximum amount of $15,000.

Importantly, the financial assistance would come in the form of a refundable tax credit. Tax credits are applied to your tax return, which means you won’t see the funds until you get your tax refund.

Did the Biden First-Time Home Buyer Act pass?

As of January 2024, the Biden First-Time Home Buyer Act has not passed. It’s possible that the act will be passed in the future. But it’s also possible the act will be defeated.

How to qualify for the Biden First-Time Home Buyer Credit

Since the Act hasn’t become law yet, the eligibility requirements included in it could change. But as of writing, home buyers must meet the following requirements to obtain the tax credit:

• You must be at least 18 years old.
• You must be purchasing the property to use as a primary residence.
• The house purchase price must be less than 110% of the area’s median home purchase price.
• Your household income must be less than 160% of the area’s median income.

Again, the eligibility details could change if the bill becomes law in the future.

Check your home buying eligibility. Start here (Dec 16th, 2025)

What is the Down Payment Toward Equity Act?

The Down Payment Toward Equity Act is another piece of proposed legislation that could help prospective home buyers achieve the goal of homeownership. As the name of the Act suggests, some first-time home buyers would qualify for a $25,000 cash grant to assist with their home purchase.

The grant wouldn’t be available to everyone. Specifically, the proposed bill includes income limits and home price limits. But as of January 2024, the Down Payment Toward Equity Act hasn’t passed yet. With that, only time will tell if this grant will become law.

Existing help for first-time home-buyers

As of this writing, neither the First-Time Home Buyer Tax Credit nor the Down Payment Toward Equity Act have become law. But that doesn’t mean that prospective homeowners can’t find financial help on their journey to homeownership.

Below is a closer look at some of the available first-time home buyer programs and home buyer assistance.

First-time home buyer programs

Prospective home buyers may find the help they are looking for through government-backed home loans. A few of the different mortgage loan types to consider include:

• FHA loans: FHA loans are backed by the Federal Housing Administration. With a minimum credit score of 580, you can make a low down payment of just 3.5 percent of the loan amount. The catch is that you’ll be required to pay mortgage insurance.
• VA loans: The Department of Veterans Affairs backs VA loans, which are available to active-duty military members, veterans, and select National Guard and Reserves members. This loan has flexible eligibility requirements, competitive mortgage rates, no private mortgage insurance, and no minimum down payment.
• USDA loans: USDA loans are backed by the U.S. Department of Agriculture. If you live in a qualifying rural area, you may not have to put anything down with this mortgage program.

But government-backed loans aren’t the only type of mortgage available to first-time buyers. Many first-time home buyers can make homeownership happen with one of the following loans:

• Conventional loans: With a credit score of at least 620, you might be able to make a down payment as small as 3%.
• Home Possible loans: Home Possible loans are available through Freddie Mac. The loan program offers a down payment requirement of 3%. It’s designed for low-income and moderate-income borrowers.
• HomeReady loans: Fannie Mae offers HomeReady loans, which are also designed for borrowers with low to moderate incomes.

Down payment assistance programs

The right loan can make a big difference to your homeownership prospects. But coming up with the funds for a down payment is still an obstacle for many would-be buyers.

The good news is that many local governments and nonprofits offer down payment assistance programs or closing cost assistance that are available to help you get into a home.

A few types of down payment assistance programs include:

• Grants: Many states offer first-time home buyer grant programs to help qualified buyers cover the down payment.
• Forgivable loans: Some states offer forgivable down payment loans, which involve forgiving your down payment loan after you live in the home for a predetermined period of time.

As you explore your options, a local housing agency or lender might be able to help you uncover all of the financial assistance possibilities.

Check your home buying eligibility. Start here (Dec 16th, 2025)

How to move forward with homeownership

Homeownership is a major financial commitment. As you gear up for this significant change, it’s important to lay the groundwork for financial stability after closing.

Below are some ways to prepare your finances for homeownership:

• Assess your existing debts: Mortgage lenders look at your debt-to-income ratio. In general, lenders prefer to work with borrowers who have a lower debt-to-income ratio. Take stock of your debts. If your have significant debts, then consider paying off some of it before applying for a mortgage.
• Look at your credit score: Evaluate your credit score to determine where you stand. While credit score requirements vary based on your loan type, a better credit score generally translates into a lower interest rate.
• Decide what you can afford: Look at your financial situation to determine how much you can comfortably afford to spend on a monthly mortgage payment. It’s important to be realistic about what you can afford before you start shopping for a home.
• Weigh your loan options: You have many different loan options to choose from. Do some research to determine which is the right fit for your situation.

When you are ready to move forward, it’s time to submit your application. And, of course, find a home that suits your needs.

First-Time Home Buyer Act FAQ

What is Biden’s $15,000 First-Time Home Buyer Act?

The Biden First-Time Home Buyer Act is a piece of proposed legislation designed to help prospective homeowners achieve homeownership. The financial assistance would come in the form of a refundable tax credit, for up to $15,000.

What is the new Biden mortgage law?

The Biden administration has proposed two different pieces of legislation related to providing financial assistance to first-time home buyers. But neither of these proposed acts have become law, as of January 2024.

Who qualifies as a first-time home buyer?

In general, an individual is considered a first-time home buyer if they haven’t owned a home in the last three years.

The bottom line: Assistance is available for first-time home-buyers

The proposals put forward by the Biden administration are aimed at helping first-time buyers achieve homeownership. But as of writing, neither of these bills has been passed. While these bills might pass in the future, it’s possible to move forward with your dream of homeownership without waiting for this proposed financial assistance.

If you are a first-time home buyer, it’s worthwhile to explore other options. For example, government-backed home loans and state-level grants could help you achieve your goal of owning a home. If you are ready to get started, get pre-approved today.

Check your home buying eligibility. Start here (Dec 16th, 2025)