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Texas Department of Housing & Community Affairs - Building Homes and Strengthening Communities

Expansion of Homebuyer Tax Credit

Federal Agency:

U.S. Department of the Treasury, Internal Revenue Service (IRS)

Modeled After This Existing Program:

Federal tax credit for homebuyers provided under Housing and Economic Recovery Act of 2008 (HERA)

Total National Funding Provided in the Recovery Act:

Credit increased up to $8,000 per household

Estimated TDHCA Annual Amount Before the Recovery Act:

N/A

Supplemental TDHCA Amount

N/A

Program Background and Specifics

  • The Recovery Act extends tax credits made available to first-time homebuyers under the Housing and Economic Recovery Act of 2008 (HERA), increasing the maximum allowable credit and extending the time period during which home purchases can be made.
  • Eligible first-time homebuyers may receive a tax refund equal to 10% of the purchase price of their home or $8,000, whichever is less.
    • Eligible households include people buying their first home and people who have not owned a home in the past three years.
    • To receive the full credit, single homebuyers can earn no more than $75,000 per year and married homebuyers filing jointly can earn no more than $150,000. A partial credit is available to certain homebuyers earning above these ceilings.
    • New provisions under the Recovery Act allow homebuyers who have purchased their home through TDHCA’s First Time Homebuyer and Mortgage Credit Certificate Programs, and similar programs administered by other housing finance agencies, to receive the credits.
  • TDHCA is in the process of designing a down-payment assistance program for recipients of the federal Homebuyer Tax Credit.

Timeline

  • This credit applies to home purchases on or after January 1, 2009 and before December 1, 2009.
  • Homebuyers apply for these credits when filing their income taxes.

Program Resources

Disclaimer: The TDHCA estimates are based on an initial analysis of ARRA and other sources and do not take into account federal rules, which may be developed by the respective federal agency responsible for these funds, and may have a direct bearing on the amount of funds made available to TDHCA and Texas. TDHCA has attempted to use existing formulas as a basis for establishing estimates of the amount of funds however the Department believes that significant adjustments will be made that will have either positive or negative impact on the final funding amounts.