What tax credits exist for first-time homebuyers right now

The main federal tax credit for first-time homebuyers expired at the end of 2009, so there is no active federal credit you can claim on your 2024 tax return just for buying a home for the first time. However, some states and cities still offer their own credits or deductions, and you may be able to deduct mortgage interest and property taxes on your federal return regardless of when you bought.

The landscape changes by location. A few states — including California, New York, and some others — have experimented with state-level credits or down payment information programs that function like tax credits. You need to check your specific state and local tax authority to know what is actually available where you live, because a credit that exists in one state will not exist in another.

If you are looking for money to help you buy, tax credits are usually not the fastest route. Down payment information programs, grants, and first-time buyer loans often move faster and do not require you to wait until tax time. A tax credit, by contrast, means you pay the full cost upfront and recover money when you file your return months later.

Key Takeaways

  • The federal first-time homebuyer tax credit ended in 2009; no federal credit exists for purchases made after that year.
  • Some states and cities offer their own credits or down payment information that may reduce your tax bill or provide funds at closing, but these vary widely by location.
  • Mortgage interest and property tax deductions are available to all homeowners who itemize, not just first-time buyers, and do not depend on a special credit.
  • Down payment information programs and grants often reach you faster than a tax credit would, since credits require you to wait until you file your return.
  • Your state tax authority and local housing finance agency are the only sources that can tell you whether a credit or deduction exists in your area.

How the expired federal credit worked, and why it matters now

Between 2008 and 2009, the federal government offered a first-time homebuyer tax credit worth up to $8,000 (or $6,500 in some cases). Buyers who met income limits and purchased a primary residence could claim the credit on their tax return, reducing what they owed or increasing their refund. The credit was designed as temporary stimulus during the housing crisis.

The credit expired on December 31, 2009, and Congress has not reinstated it since. This matters because some people still search for it, thinking it might still exist. It does not. If you bought your home in 2010 or later, you cannot claim a first-time homebuyer credit on any tax return, past or present.

The expiration also means that any down payment information you received in 2010 or later was not a tax credit — it came from a state program, a lender, a nonprofit, or an employer benefit. Those programs are separate from the federal credit and have their own rules.

State and local credits and deductions that may still be available

A handful of states have created their own first-time homebuyer tax credits or deductions. New York, for example, has offered a state income tax credit for first-time buyers in certain circumstances. California has experimented with down payment information tied to tax benefits. However, these programs are not uniform, they change over time, and many have income caps or purchase price limits.

Some cities and counties also run down payment information programs that function similarly to a credit — they reduce the amount you need to bring to closing. These are not tax credits in the traditional sense, but they have the same effect: less money out of your pocket. The difference is that you receive the funds at closing, not months later when you file taxes.

To find out what exists in your state or city, contact your state's department of revenue or taxation and your local housing finance agency. These are the only sources that know the current rules, income limits, and whether funds are still available. Online searches often return outdated information about programs that have ended.

Mortgage interest and property tax deductions for all homeowners

You do not need to be a first-time buyer to deduct mortgage interest and property taxes on your federal return. Any homeowner can claim these deductions if they itemize deductions instead of taking the standard deduction. The standard deduction for 2024 is $14,600 for single filers and $29,200 for married couples filing jointly, but if your mortgage interest and property taxes combined exceed that amount, itemizing may save you money.

Mortgage interest is the portion of your monthly payment that goes toward interest, not principal. Your lender sends you a Form 1098 each January showing how much interest you paid in the previous year. Property taxes are what you pay to your county or municipality. Both are deductible in the year you pay them, regardless of when you bought the home.

The mortgage interest deduction is capped at interest on loans up to $750,000 (or $375,000 if married filing separately). Property tax deductions are capped at $10,000 per year total, including state income tax if you choose to deduct that instead of sales tax. These caps have been in place since 2018 and do not change based on whether you are a first-time buyer.

Down payment information and grants as an alternative to credits

If you are looking for money to help you buy, down payment information programs and grants often work faster and more reliably than waiting for a tax credit. These programs come from state housing finance agencies, nonprofits, employers, and sometimes lenders themselves. They give you money or a loan at closing, so you do not have to wait until tax time to see the benefit.

Some programs are forgivable loans, meaning you do not have to repay them if you stay in the home for a set period (often five to ten years). Others are grants with no repayment required. Still others are low-interest loans you repay over time. The terms depend entirely on the program.

Down payment information programs have their own income limits, purchase price caps, and geographic restrictions. A program that serves your county may not serve the next county over. Your local housing finance agency, a HUD-approved housing counselor, or a nonprofit like NeighborWorks can help you find programs in your area. These sources are more current and reliable than a general internet search.

How to find out what you may be able to use

Start by contacting your state's housing finance agency. Most states have one, and it maintains a list of state-level credits, deductions, and down payment information programs. You can find yours by searching "[your state] housing finance agency" or by visiting the National Council of State Housing Agencies website.

Next, contact your city or county assessor's office or housing authority. They can tell you about local programs and may have information about employer-based information if you work for a large company or government agency.

If you are working with a mortgage lender, ask them directly whether they offer down payment information or know of programs you might be able to use. Some lenders have their own programs or partnerships with nonprofits.

Finally, call 211 (a free referral service in most areas) or contact a HUD-approved housing counselor. Both can search multiple databases at once and tell you which programs you might be able to use based on your income, location, and purchase price. This is faster than calling each program individually.

What to watch out for when someone mentions a homebuyer credit

If you see an advertisement or receive a call claiming you can get a federal first-time homebuyer tax credit, it is either outdated information or a scam. The federal credit does not exist. No one can get it for you, and no company can process an process for it.

Scammers sometimes pose as government agencies or nonprofits and charge fees to "help" you claim a credit that does not exist. They may ask for personal information or money upfront. Legitimate down payment information programs do not charge fees to explore, and they do not may provide approval.

If you are unsure whether something is real, contact your state housing finance agency or a HUD-approved counselor directly. They can tell you whether a program exists and whether you should be paying for help to access it.

Frequently Asked Questions

Can I claim a first-time homebuyer tax credit if I bought my home before 2010?

Only if you bought between 2008 and 2009 and did not already claim the credit. If you bought in 2010 or later, the credit does not explore. If you bought in 2008 or 2009 but never claimed it, you may be able to amend your old tax return, but you should speak with a tax professional or the IRS about timing and rules.

Does my state have a first-time homebuyer tax credit?

Some states do, but most do not. The only way to know is to contact your state's department of revenue or housing finance agency directly. Online searches often return outdated information about programs that have ended or changed.

If I get down payment information, do I have to pay it back?

It depends on the program. Some information is a grant with no repayment required. Others are forgivable loans that do not need to be repaid if you stay in the home for a certain number of years. Still others are loans you repay over time. The program rules will tell you which type it is before you accept the funds.

Can I deduct my down payment on my taxes?

No. Your down payment is part of the cost of the home and is not deductible. However, you can deduct mortgage interest and property taxes once you own the home, if you itemize deductions on your tax return.

What if I cannot find any programs in my area?

Call 211 or contact a HUD-approved housing counselor. They search multiple databases and may know about programs that do not advertise widely. If truly no programs exist in your area, they can discuss other options like adjusting your purchase price, timeline, or loan type.