WASHINGTON – Senator Ruben Gallego (D-AZ) joined 14 Senate colleagues in introducing 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.
“Owning a home is a cornerstone of the American dream. But for too many hardworking families, that dream is out of reach,” said Senator Gallego. “First-time homeowners deserve a break, and this bill gives it to them. I’m proud to introduce it with my colleagues and help the next generation of homeowners make their start.”
In 2022, the median sale price for a home in the U.S. was 5.6 times higher than the median income, a higher ratio than during the years immediately before the 2007 mortgage crisis, and the highest disparity on record. In Phoenix, the percentage of homes affordable to median-income households fell from 64.9% in 2019, to 21.7% in 2024.
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 typical age of a first-time homebuyer reached a record high of 38, up from 29 in 1981.
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 legislation is endorsed by the National Association of REALTORS (NAR), National Association of Home Builders (NAHB), Cooperative Credit Union Association, and Mortgage Bankers Association.
The full text of the bill is available HERE.
Senator Gallego has made lowering the cost of housing a key priority in the Senate. This week, he introduced the bipartisan Housing Supply Expansion Actand Streamlining Rural Housing Actto update outdated and redundant federal regulations that hold back building. Earlier this year, he introduced the bipartisan Housing Affordability Act to increase the Federal Housing Administration’s multifamily housing loan limits to help developers access the financing they need to build more housing; the Stop Predatory Investing Actand Humans Over Private Equity (HOPE) for Homeownership Act to go after the hedge funds that own and control large parts of the housing market; and the Housing Vouchers Fairness Act to make sure fast-growing cities like Phoenix get their fair share of federal housing assistance.
7/25/25