A first-time homebuyer tax credit is a dollar-for-dollar reduction of your tax burden when you buy a home and meet first-time homebuyer eligibility criteria. For example, if you qualify for a $5,000 tax credit, it would directly reduce the amount of taxes you owe by $5,000.
However, the tax credits under that law were temporary and only applied to new homebuyers between April 8, 2008 and May 1, 2010. Since then, no federal first-time homebuyer tax credit has been enacted into law.The First-Time Homebuyer Act of 2021 was introduced to Congress in April 2021. This bill was intended to raise the maximum credit limit from $8,000 to $15,000, but it failed to pass.
Not all states offer MCCs. To find out if your state is one of the 28 states that do, contact your local housing authority.