by BRITTANY ANAS

The One Thing You Need to Know About Biden’s Tax Credit for First-Time Homebuyers

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Federal tax credits

have been dangled in front of first-time homebuyers in the past — a $7,500 credit in 2008 that came with a repayment stipulation and a more appealing $8,000 credit in 2009 that didn’t require repayment. 

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While advantageous for buyers, these past credits were primarily intended to stimulate home sales in a distressed housing market.

Now, the 2021 housing market is booming. Interest rates are at record lows and homes are getting snapped up almost as soon as the “for sale” sign goes up. 

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This time around,

a first-time buyer tax credit that’s a key part of President Joe Biden’s $640 billion housing plan is meant to increase homeownership by helping new buyers shore up a down payment.

If you’re an
aspiring homebuyer,

the one thing you should know about Biden’s first-time buyer credit is that, if approved, it would provide up to $15,000 in down payment assistance to first-time buyers — and do so by the time you close, rather than making the credit available the following year when filing taxes.

If it’s rolled out, the down payment assistance could remove a barrier that’s kept homeownership out of reach for many buyers who could otherwise afford the monthly payments, especially now that interest rates are lower.

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Biden outlines in his plan that he wants to make a larger pool of homes available and provide access to low-interest loans to rehab these homes should they need updating. 

Biden’s proposals could help pave the path to homeownership for many, though it’s important to note some details could be changed or nixed before the plan is approved—if it is indeed approved.

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