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DASH Act Seeks to Offer a $15,000 First-time Homebuyer Tax Credit

DASH Act Seeks to Offer a $15,000 First-time Homebuyer Tax Credit
Tim Lucas - Home.com
VP of Content, Home.com

Yet another impressive first-time homebuyer tax credit has been proposed by the nation’s lawmakers.

The Decent, Affordable, Safe Housing for All Act, or DASH Act, seeks to offer first-time homebuyers a tax credit of $15,000.

The bill, introduced by Senate Finance Committee Chair Ron Wyden, follows a string of down payment assistance proposals to come out of Washington in 2021, including a $25,000 down payment bill and an separate $15,000 tax credit earlier this year.

Things are looking up for first-time homebuyers who lack a down payment.

What's in this Article?

Who would be eligible for the credit?
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5 taxable year holding period required
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When will the tax credit be available?
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How would buyers receive funds?
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Should you wait for the credit?
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Who would be eligible for the credit?

The bill, if passed, would be available to first-time homebuyers.

While some programs define a first-time buyer as someone who hasn’t owned in 3 years, this bill defines it as someone who has never owned before at all.

Additionally, the buyer must be purchasing a home they plan to live in, a.k.a a “primary residence.”

This is because lawmakers are trying to promote homeownership, and this is great news for those who don’t own a home yet.

There are income limits to ensure the credit goes to those who most need it. Buyers must make no more than $100,000 annually if filing individually, $150,000 if filing as head of household, and $200,000 for those filing jointly.

Additional rules are as follows.

  • The down payment credit could cover up to 20% of the home price
  • The maximum dollar amount would be $15,000
  • The maximum home price would be 10% higher than the conforming loan limit

The conforming loan limit in most of the country is $548,250 in 2021. The limit, then, would be around $603,000.

That number goes up in expensive areas that have higher conforming loan limits, like Seattle, Washington. In that city, the maximum home price would be around $850,000.

5 taxable year holding period required

As with most of these bills, the buyer must live in the home for a set time.

The tax credit would need to be repaid if the home was sold or converted to a rental or vacation home within a 5 taxable year period.

The bill describes a 5-year waiting period after the credit is claimed. The first year doesn’t start until a year after the buyer receives the credit.

Each year, the repayment requirement decreases by 20%. For purposes of the example, assume the bill passed and was signed into law in 2021. Remember, this is just an example. The bill is still in very early stages with no guarantees of passage.

Continuing the example, you purchase a home, file taxes, and receive the credit in 2022.

Year sold or vacated Percent of credit to repay
2022100%
2023100%
202480%
202560%
202640%
202720%
20280%

Because of the relatively long holding requirement, buyers should be relatively certain they will be in the same area for the foreseeable future.

There are exceptions to the rule, such as death, divorce, or relocation due to military change of station. But buyers shouldn’t assume they will be exempt, or that repayment rules won’t apply to them.

When will the DASH Act tax credit be available?

It’s still unclear whether this legislation will pass or what it might look like if it does. Often, bills change dramatically in the process of passing through the House and Senate. Visit this page often for updates.

How would buyers receive funds?

Funds would come in the form of a tax credit which buyers would receive after filing taxes.

While the funds would help buyers, they would have to come up with the down payment first, then be reimbursed via their tax return, potentially more than a year later.

The plan wouldn’t be as helpful as an upfront assistance payment proposed in previous bills.

Still, there are many loan types that require little or no down payment.  Homebuyers could purchase with a small cash outlay, then receive the credit later.

Should you wait for the DASH Act credit?

Probably not. Bills can take a long time to work through Congress, and they often look very different on the other side.

Home prices are may rise, and could skyrocket well beyond any credit you would receive.


If you can qualify for a loan and you’re ready financially, it’s best to buy a home as soon as you can.


Some references sourced within this article have not been prepared by Fairway and are distributed for educational purposes only. The information is not guaranteed to be accurate and may not entirely represent the opinions of Fairway.

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