U.S. Senators Sheldon Whitehouse (D-RI) and Martin Heinrich (D-NM) alongside Representatives Jimmy Panetta (D-CA) and Earl Blumenauer (D-OR) introduced the First-Time Homebuyer Tax Credit Act, a landmark initiative designed to facilitate homeownership among lower- and middle-income Americans. The legislation proposes a refundable tax credit worth up to 10 percent of a home’s purchase price – capped at a maximum of $15,000 – for first-time homebuyers.
“Owning a home is quintessential to the American dream, but it has become increasingly out of reach for many families in recent years,” emphasized Senator Whitehouse. “Our legislation aims to make homeownership a tangible reality for more Rhode Islanders, providing stability and a pathway to building wealth.”
Senator Heinrich echoed these sentiments, stating, “Purchasing your first home signifies more than mere property ownership; it embodies pride, stability, and optimism for the future. With this legislation, we’re striving to level the playing field, ensuring that every working family has an equal shot at achieving the American dream of homeownership.”
Representative Panetta underscored the significance of addressing high housing costs, asserting, “The soaring costs of housing are placing the dream of homeownership out of reach for countless Americans. Our legislation seeks to alleviate this burden by offering qualifying first-time homebuyers a $15,000 tax credit, empowering them to establish roots and build equity in our communities.”
Highlighting the necessity of federal intervention to tackle housing affordability issues, Representative Blumenauer emphasized, “Decades of policy decisions have exacerbated the housing crisis, necessitating a concerted effort to level the playing field. By incentivizing families historically locked out of homeownership, we can foster housing stability and generational wealth-building opportunities for low- and middle-income Americans.”
According to a study by the U.S. Environmental Protection Agency (EPA), the median sale price for a home in the U.S. in 2022 was 5.6 times higher than the median income, marking the highest disparity on record. In Rhode Island, no communities currently allow families earning the state’s median income to afford a typical home. Nationally, the shortage of affordable housing opportunities costs the American economy an estimated $2 trillion annually, stifling economic mobility and opportunities for affected individuals and communities.
The proposed legislation, co-sponsored by U.S. Senators Tammy Baldwin (D-WI), Jack Reed (D-RI), Tina Smith (D-MN), and Peter Welch (D-VT), seeks to address these challenges by offering eligible taxpayers the option to receive the credit either at the time of purchase or retroactively in the preceding taxable year.
The credit phases out for individuals earning above 150 percent of the area median income and for those purchasing homes exceeding 110 percent of the area median purchase price. Additionally, the credit is exclusively available for home purchases financed through federally backed mortgages.
Stefan Pryor, Rhode Island’s Secretary of Housing, affirmed the significance of the proposed legislation in supporting lower- and middle-income families, noting, “By alleviating the financial strain on first-time buyers, this legislation can transform the dream of homeownership into a reality for more Rhode Islanders.”
The bill has garnered widespread support from industry stakeholders, including the National Association of REALTORS®, Rhode Island Association of REALTORS®, CALIFORNIA ASSOCIATION OF REALTORS®, and the Cooperative Credit Union Association.
The introduction of the First-Time Homebuyer Tax Credit Act marks a pivotal step towards fostering homeownership opportunities and economic stability for individuals and families nationwide.
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