Congratulations on taking one of the biggest leaps of your life – becoming a homeowner! The pandemic and the resulting economic downturn may have slowed things down for many, but homeownership continued. In fact, Pew Research Center data suggests the number of homeowners swelled by a formidable 2.1 million from 2019 to 2020.

When it comes to buying your first home, there are so many considerations, whether you prefer freshly minted or pre-loved constructions. But no matter what you choose, your first home is a source of immense pride, a reflection of your unique identity in every nook and cranny. However, with great power comes great responsibility, especially financial. Luckily, programs like first-time homebuyer credits can ease some of that burden. With this new milestone, you can paint the town, or rather, your new home, red.

What Are First-Time Homebuyer Credits?

If you’re dreaming of owning your first home, you might also find yourself worried about the steep costs associated with buying a property. You're not alone, but don't despair – there are first-time homebuyer credits available to help ease the financial burden. The federal government offers a First-Time Homebuyer Tax Credit, while states also have their own programs that may be applicable depending on where you purchase your home. These credits aim to make homeownership more accessible, providing much-needed relief for the down payment and closing costs that can be overwhelming for many. So, if you're ready to take the first step towards making your dream of being a homeowner a reality, let's explore the options available to you.

First-Time Homebuyer Tax Credit

Thanks to the recent passage of the First-Time Homebuyer Act, you could be eligible for a tax credit of up to $15,000, equal to 10% of your home's purchase price. You qualify if you purchased your home any time after December 31, 2020. Of course, there are some requirements you'll need to meet to take advantage of this fantastic offer. But if you're ready to make that big leap into homeownership, the First-Time Homebuyer Tax Credit could be just the boost you need to get started on the right foot. Here is what you need to qualify.

• You are buying your very first home, or you haven’t owned a home within the last three years.

• Your income cannot be more than 160% of the median income of the area in which you are buying.

• The purchase price of the home cannot be more than 110% of the median purchase price in the area in which you are buying.

• You must use the home as your primary residence for at least four years (if you don’t, you will need to pay additional taxes to pay back a portion of the tax credit).

This tax credit news is a game-changer for homeowners. Let me break it down for you: imagine owing a whopping $18,000 in taxes. But with this credit, you could see that number shrink down to a mere $3,000. That's pretty sweet. And even if you only owe $11,000 in taxes, you could be looking at a refund of $4,000.  It's like getting a chunk of your hard-earned money back in your pocket. So, if you're an eligible homeowner, you'll definitely want to take advantage of this incredible opportunity when you file your taxes. 

State First-Time Homebuyer Credits

If you’re feeling overwhelmed by the thought of buying your first home, don't fret. Many states offer tax credit options for first-time homebuyers, so you can get some extra help with your mortgage payments. Several states have annual tax credits available, so it's worth looking into what your state offers. To see what first-time homebuyer credits are available in your area, simply head to your state mortgage agency's website. You might be pleasantly surprised by the assistance out there to make your dream of owning a home a reality.

Other First-Time Homebuyer Credits

Aside from the federal and state tax credits, there are a few other credits and types of financial support you may qualify for as a first-time homebuyer. These include:

• Residential Energy Efficient Property Credit. This federal tax credit allows you to convert a portion of the cost of things like fancy new furnaces and solar electric equipment into a tax credit. 

• State and municipal tax credits. These beauties include property tax and renewable energy tax credits, but availability varies depending on where you live. So, check with your local government office or a tax professional to see what credits you might be eligible for. 

• State programs. Many states have grants and plenty of other programs to help you out financially and may even help with your down payment or closing costs when buying your first home.

Are You Eligible for First-Time Homebuyer Credits?

Step into the world of homeownership and achieve your dreams with some financial support. Do your due diligence to find out how you can avail federal, state, and municipal tax credits as a low- or middle-income renter looking to buy your first home. Don't settle for a life of renting when you have the power to invest in your future. Take the first step towards homeownership and explore one of our affordable new home communities today to discover stunning designs, flexible floor plans, and a Centex support team that enables you to hunt for a new home with confidence.