Heinrich, Luján, Whitehouse, Colleagues Reintroduce Bicameral Bill to Make Homeownership More Accessible for First-Time Buyers

WASHINGTON – RealEstateRama – U.S. Senators Martin Heinrich (D-N.M.), Ben Ray Luján (D-N.M.), and Sheldon Whitehouse (D-R.I.) led 12 Democratic senators in reintroducing the First-Time Homebuyer Tax Credit Act, legislation that aims to support middle-class Americans purchasing their first home. The bill would establish a refundable tax credit worth up to 10 percent of a home’s purchase price – up to a maximum of $15,000 – for first-time homebuyers.

“Buying your first home is more than just owning property: It’s a source of pride, stability, and hope for the future. Unfortunately, buying a home is out of reach for many families right now. We’re changing that with my First-Time Homebuyer Tax Credit Act,” said Heinrich. “I’m proud to reintroduce this bill to ease the financial burden on aspiring homeowners and give every working family an equal opportunity to realize the American dream of owning a home.”

“Homeownership is a goal for countless New Mexicans, but it’s slipping further out of reach due to soaring housing costs. Congress must take meaningful action to make owning a home more attainable and affordable,” said Senator Luján. “I’m proud to join my colleagues in reintroducing the First-Time Homebuyer Tax Credit Act to support working families and help more New Mexicans purchase their first home.”

“Owning a home is at the core of the American dream, but too many young families have been priced out of homeownership in recent years because of the housing supply crunch.  And Trump’s chaotic tariff regime has increased homebuilding costs, forcing developers to pause construction on much-needed new units,” said Whitehouse. “Our tax credit for first-time homebuyers would help make the American dream a reality for more of the young Americans left behind in Trump’s billionaire-first economy.”

A report by Housing New Mexico, the state’s housing finance authority, found that the median sale price of homes in New Mexico in 2024 was $345,000, an increase of almost 60% from 2019. This means that a traditional 20% down payment on a home would exceed $60,000.

In 2023, the median sale price for a home in New Mexico was 5 times higher than the median income. Estimates from the New Mexico Homebuilders Association anticipate that the cost of building a single-family home could soon rise by more than $11,000 thanks to President Trump’s tariff agenda, which has increased the cost of many materials and appliances used to build houses.

Nationwide, the shortage of affordable housing opportunities costs the American economy an estimated $2 trillion each year. High housing costs reduce disposable income and economic mobility, stifling economic opportunities for those who can no longer afford housing in their communities.

Housing unaffordability is uniquely harmful to younger Americans, who are struggling to reach the same milestones their parents did at their age. In 2024, the average age of a first-time homebuyer reached a record high of 38, up from 29 in 1981. And first-time homebuyers, as a percentage of all homebuyers nationwide, fell from 38 percent to 24 percent over that same period, the lowest percentage ever recorded.

Under the First-Time Homebuyer Tax Credit Act, taxpayers would have the option of receiving the credit at the time of purchase by working with their mortgage issuer.  Alternatively, taxpayers could elect to treat the purchase of their home as occurring in the prior taxable year to receive the credit before tax season if they are unable to qualify for the credit at point of sale.

The credit phases out for those making above 150 percent of area median income and for those buying a house with a purchase price above 110 percent of the area median purchase price. Additionally, the credit is limited to home purchases financed through federally backed mortgages.

The First-Time Homebuyer Tax Credit Act is cosponsored by U.S. Senators Peter Welch (D-Vt.), Tammy Baldwin (D-Wis.), Jack Reed (D-R.I.), Tina Smith (D-Minn.), Jacky Rosen (D-Nev.), Richard Blumenthal (D-Conn.), Chris Van Hollen (D-Md.), Lisa Blunt Rochester (D-Del.), Andy Kim (D-N.J.), Ruben Gallego (D-Ariz.), and Angela Alsobrooks (D-Md.). Congressmen Jimmy Panetta (D-Calif.) and Mike Thompson (D-Calif.) led the reintroduction of the legislation in the House of Representatives.

The legislation is also endorsed by the National Association of REALTORS, National Association of Home Builders, Cooperative Credit Union Association, Mortgage Bankers Association, Rhode Island Executive Office of Housing, Rhode Island Association of REALTORS, RIHousing, Housing Network of Rhode Island, HousingWorksRI, Rhode Island Builders Association, Rhode Island Mortgage Bankers Association, Santa Clara County REALTORS, Santa Cruz County REALTORS, and Monterey County REALTORS.

“Saving for a down payment is one of the biggest barriers to homeownership, and the First-Time Homebuyer Tax Credit Act would be another advantage for those Housing New Mexico serves through its existing homeownership programs,” said Housing New Mexico, Mortgage Finance Authority (MFA) CEO/Executive Director Isidoro Hernandez. “We have witnessed firsthand how these types of incentives provide the opportunity for homeownership – and, in turn, wealth – to so many people who may feel left behind in the current market. This legislation would work well with the programs MFA currently offers. The First-Time Homebuyer Tax Credit Act would be a great resource for New Mexicans who want to become homeowners.”

The full text of the bill is available here.

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