First-time homebuyer tax credit 2026: what's in Congress and what to do now

There is no federal first-time homebuyer tax credit currently available — but one is actively moving through Congress. The Make American Housing Affordable (MAHA) Act, introduced in January 2026, would create a tax credit of up to $5,000 for individual filers and $10,000 for joint filers purchasing a primary residence. A tax credit is a dollar-for-dollar reduction in the income taxes you owe, which makes it more valuable than a deduction. To qualify under the MAHA Act as proposed, individual filers must earn under $250,000 (phasing out at $300,000) and joint filers must earn under $500,000 (phasing out at $600,000). The credit could be claimed once every five years per homeowner.

The bill has not passed. "Introduced" means it has been formally proposed — it still needs to clear committee review, pass both chambers, and be signed into law before any buyer can use it. A separate Democratic bill proposing a $15,000 refundable credit is also in Congress.

While these bills work through the legislative process, first-time buyers have access to real programs today: down payment assistance, FHA and conventional low-down-payment loans, and state-level mortgage credit certificates. Getting pre-approved now shows you exactly what you can afford at today's rates, regardless of what Congress does.

What the MAHA Act would do

The Make American Housing Affordable Act was introduced on January 28, 2026 by Rep. Tom Kean Jr. (NJ-07) and co-led by Rep. Ryan Mackenzie (PA-07). As proposed, it would amend the Internal Revenue Code to establish a new homebuyer tax credit with the following terms:

The credit is designed for any buyer purchasing a primary residence — not just first-time buyers in the traditional sense. That distinguishes it from the Biden-era proposals, which tied eligibility strictly to first-time ownership status. The five-year claimable window means repeat buyers who haven't used the credit in five years could also qualify if the bill passes as introduced.

What "introduced" means — and why it matters

A bill being introduced to Congress is the first step in a long process, not the finish line. After introduction, the MAHA Act would need to be assigned to a committee (typically the House Ways and Means Committee for tax legislation), pass out of that committee, pass a full House vote, pass the Senate, and be signed by the President before it becomes law. Most bills introduced in Congress do not make it through all of those stages.

This matters for buyers who may have read headlines suggesting the credit is available or imminent. It is not. There is no application process, no effective date, and no guarantee it passes. Planning your purchase around a bill that has not yet become law introduces real risk — particularly in a rate environment where waiting has a measurable cost.

Other first-time buyer bills in Congress right now

The MAHA Act is not the only housing-related tax credit proposal active in the 119th Congress. A separate bill — the First-Time Homebuyer Tax Credit Act — has been reintroduced by Democratic members and proposes a refundable credit of up to $15,000 for eligible buyers, tied to area median income thresholds rather than fixed dollar amounts. A third proposal, the Bipartisan American Homeownership Opportunity Act, would allow first-time buyers to claim a credit equal to the amount of their down payment, up to $50,000, subject to income limits — and would also include a tax credit for builders who construct small starter homes.

These competing proposals reflect broad bipartisan agreement that housing affordability is a crisis — but disagreement on how to address it and, critically, how to pay for it. Federal homebuyer tax credits are expensive at scale. A $15,000 credit available to millions of buyers would cost hundreds of billions of dollars over a decade. That cost challenge is one reason these bills have been proposed and not passed across multiple sessions of Congress.

The bottom line for buyers: it is reasonable to be aware of these proposals, but not to depend on any of them.

What first-time buyers can actually use right now

The absence of a federal tax credit does not mean buyers have no tools. The programs that exist today are real, funded, and widely underused.

Down payment assistance programs. According to recent industry data, there are more than 2,600 down payment assistance programs currently active nationwide, offering an average of $18,000 in benefits. These programs are administered at the state, county, and city level — many are grants that do not require repayment. Eligibility typically requires income limits and, in most cases, first-time buyer status. The tips for first-time home buyers guide covers how to find and apply for DPA programs in your state.

FHA loans. FHA-backed mortgages allow down payments as low as 3.5% with a credit score of 580 or higher. They carry mortgage insurance, but for buyers who don't have 20% saved, they open a path to homeownership without waiting years to accumulate a larger down payment. How to qualify for a home loan walks through the full FHA qualification picture.

Conventional 3% down loans. Fannie Mae's HomeReady and Freddie Mac's Home Possible programs allow conventional mortgages with as little as 3% down for buyers who meet income requirements. These avoid some of the costs of FHA lending and can be a strong option for buyers with solid credit.

State mortgage credit certificates (MCCs). Many states offer mortgage credit certificates — a type of tax credit that already exists — through their housing finance agencies. An MCC converts a portion of the mortgage interest you pay each year into a direct tax credit, typically 20–40% of annual interest paid, up to $2,000 per year. Unlike the proposed federal credits, MCCs are active, real, and available in most states. Ask your lender whether your state offers one.

Penalty-free IRA withdrawals. First-time buyers can withdraw up to $10,000 from a traditional IRA without the standard 10% early-withdrawal penalty. Regular income taxes still apply to the amount, so this works best as a supplement to other funds rather than a primary down payment source — but for buyers with retirement savings, it provides some flexibility.

Mortgage interest deduction. Once you own a home, you can deduct mortgage interest paid on loans up to $750,000 on your federal tax return if you itemize. This is not a credit, but it reduces taxable income and adds up meaningfully over the first several years of a loan when interest payments are highest.

You can also explore whether buying a house with no down payment is possible through VA or USDA loans if you qualify. And before any of this, how to shop around for mortgage rates can help you secure the most competitive terms available on your loan.

How to qualify as a first-time buyer

The definition of "first-time homebuyer" is more flexible than most people realize. For the purposes of most federal programs, HUD, and the majority of state-level DPA programs, a first-time buyer is someone who has not owned a primary residence in the past three years — not necessarily someone who has never owned a home.

That three-year window means some previous homeowners can requalify. Additional exceptions often include single parents who previously co-owned only with a former spouse, displaced homemakers who previously co-owned only with a spouse, and individuals whose only prior home was a mobile home or other non-permanently affixed dwelling.

Your first-time buyer status matters because it unlocks specific programs that aren't available to repeat buyers. If you're unsure whether you qualify, the fastest answer comes from starting the pre-approval process — a lender can confirm your eligibility across available programs based on your specific situation. Get pre-approved to see exactly what you qualify for.

Should you wait for a tax credit before buying?

The honest answer: probably not, unless your financial situation genuinely isn't ready yet.

Here's the math. The MAHA Act, if it passed, would be worth up to $10,000 for joint filers. At today's current mortgage rates of 6.57% for a 30-year fixed, waiting six months to a year for a bill to pass — if it passes — while renting costs you real money. If you're paying $2,000 per month in rent, that's $12,000 to $24,000 in rent payments that don't build equity, before accounting for any home price appreciation during the wait.

Example is for illustrative purposes only. Rates, payments, and total interest will vary based on credit profile, loan terms, and market conditions.

There's also no guarantee the bill passes at all. Multiple similar proposals over the past several years have been introduced and not become law. Waiting for an uncertain legislative outcome while paying rent and potentially watching home prices and rates move is a strategy with real downside risk.

None of this means you should rush a decision you're not financially ready to make. The right question isn't "should I wait for the credit" — it's "am I financially positioned to buy a home today that works for my budget at today's rates?" To answer that, you need a real pre-approval number, not a national average or a hypothetical tax credit. Use the mortgage calculator to estimate monthly payments at current rates, then get pre-approved to see your actual rate and purchase power.

Frequently asked questions

Is there a first-time homebuyer tax credit available in 2026?

No federal first-time homebuyer tax credit is currently available. The original credit expired in 2010. The MAHA Act was introduced in January 2026 and would create a new credit, but it has not passed into law. Several other proposals are also active in Congress. Until one passes, no buyer can claim a federal homebuyer tax credit.

What is the MAHA Act and would I qualify for the homebuyer tax credit?

The Make American Housing Affordable Act is a bill introduced in January 2026 that would create a tax credit of up to $5,000 for individual filers and $10,000 for joint filers purchasing a primary residence. Individual filers earning under $250,000 would receive the full credit; it phases out at $300,000. Joint filers earning under $500,000 would receive the full credit; it phases out at $600,000. The credit would be claimable once every five years and is not restricted to first-time buyers. The bill has not passed, so no buyer can currently apply for or claim it.

I'm planning to buy my first home this year — should I wait for a tax credit bill to pass?

Waiting for an unresolved bill introduces risk. The cost of renting while you wait — and the possibility that rates or home prices shift — is real and immediate. The potential tax credit is uncertain and may not arrive on any defined timeline. If your finances are ready, buying at today's rates with the programs available now is generally more reliable than waiting on a legislative outcome. That said, your individual situation matters — run the math on what waiting actually costs you versus what the credit would be worth.

I earn $95,000 as a single filer — would I qualify for the MAHA Act tax credit?

Under the bill as introduced, yes — a single filer earning $95,000 would be well below the $250,000 income threshold for the full $5,000 credit. But again, the bill has not passed. Eligibility terms could also change as it moves through the legislative process, if it does.

What first-time homebuyer programs actually exist right now that I can use today?

There are several. Down payment assistance programs — more than 2,600 nationwide — provide an average of $18,000 in benefits and are available through state and local housing agencies. FHA loans allow 3.5% down payments with a 580+ credit score. State mortgage credit certificates offer an existing tax credit on a portion of your annual mortgage interest. Conventional 3% down loan options exist through government-sponsored programs. And eligible veterans can access VA loans with no down payment required.

What's the difference between a tax credit and down payment assistance?

A tax credit reduces the amount of federal income tax you owe, dollar for dollar — you claim it on your tax return after you buy. Down payment assistance is money provided at the time of purchase to help cover your down payment and closing costs; some forms are grants that don't need to be repaid. Both reduce the cost of buying a home, but they work differently and at different points in the process. The first-time homebuyer tax credit history article explains how prior federal credits worked and what buyers used them for.

Is the MAHA Act the same as the $25,000 first-time buyer grant I keep seeing online?

No. The $25,000 Downpayment Toward Equity Act was a separate Biden-era proposal that has not been reintroduced under the current Congress and is not active legislation. The MAHA Act is a different bill, introduced in 2026, that would function as a tax credit rather than a cash grant. The two proposals have different eligibility structures, different mechanisms, and different legislative status.

My parents owned a home — does that affect whether I qualify as a first-time buyer?

No — your parents' homeownership history does not affect your first-time buyer status. The standard definition looks at your own history: whether you have held a primary ownership interest in a residence in the past three years. Your family members' ownership is irrelevant unless you were also listed on their mortgage or deed as a co-owner.