Bipartisan American Homeownership Opportunity Act of 2025

Down Payment Assistance: First-time homebuyers can receive a tax credit for their down payment up to $50,000, which helps reduce the upfront cost of buying a home (Section 2(a)).

Advanced Payment Option: Homebuyers have the option to have their credit transferred directly to a qualifying escrow account to assist with the purchase process (Section 2(d)(1)).

Construction Incentives: Individuals building homes can receive a credit equal to 15 percent of qualified construction costs (Section 3(a)).

Increased Support for First-Time Buyers: If a home is sold to a first-time homebuyer, the construction credit increases from 15 percent to 30 percent (Section 3(c)).

Income Restrictions: The first-time homebuyer credit is reduced for individuals whose modified adjusted gross income exceeds certain thresholds, such as $300,000 for joint returns or $150,000 for others (Section 2(b)).

Credit Recapture: Taxpayers may have to pay back the credit if they sell their home, lease it to a third party, or if it ceases to be their principal residence within five years (Section 2(e)).

Construction Limitations: The starter home construction credit is limited to housing units that do not exceed 1200 square feet and have a sale price not exceeding 80 percent of the area median home price (Section 3(d)).

Strict Requirements for Credit Eligibility: To qualify for the homebuyer credit, taxpayers must attach a properly executed copy of the settlement statement to their tax return (Section 2(c)(4)).