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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 10025 Introduced in House (IH)]

<DOC>

118th CONGRESS
  2d Session
                               H. R. 10025

  To amend the Internal Revenue Code of 1986 to establish a new first-
 time homebuyer credit and to establish the starter home construction 
                                credit.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            October 22, 2024

  Mr. Gomez introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL

 
  To amend the Internal Revenue Code of 1986 to establish a new first-
 time homebuyer credit and to establish the starter home construction 
                                credit.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Homeownership Opportunity 
Act of 2024''.

SEC. 2. FIRST-TIME HOMEBUYER CREDIT.

    (a) In General.--Section 36 of the Internal Revenue Code of 1986 is 
amended to read as follows:

``SEC. 36. FIRST-TIME HOMEBUYER CREDIT.

    ``(a) In General.--In the case of an individual who is a first-time 
homebuyer of a principal residence in the United States during a 
taxable year, there shall be allowed as a credit against the tax 
imposed by this subtitle for such taxable year an amount equal to so 
much of the amount of the down payment paid by such taxpayer to 
purchase such principal residence as does not exceed $25,000.
    ``(b) Limitation.--
            ``(1) In general.--The amount allowable as a credit under 
        subsection (a) (determined without regard to this paragraph) 
        for the taxable year shall be reduced (but not below zero) by 
        the amount which bears the same ratio to the amount which is so 
        allowable as--
                    ``(A) the excess (if any) of--
                            ``(i) the taxpayer's modified adjusted 
                        gross income for the preceding taxable year, 
                        over
                            ``(ii) the applicable threshold amount, 
                        bears to--
                    ``(B) $100,000.
            ``(2) Threshold amount.--For purposes of this subsection, 
        the term `threshold amount' means--
                    ``(A) $300,000 in the case of a joint return or 
                surviving spouse,
                    ``(B) $225,000 in the case of a head of household, 
                or
                    ``(C) $150,000 in the case of any other individual.
            ``(3) Modified adjusted gross income.--For purposes of 
        paragraph (1), the term `modified adjusted gross income' means 
        the adjusted gross income of the taxpayer for the taxable year 
        increased by any amount excluded from gross income under 
        section 911, 931, or 933.
    ``(c) Increase in Credit for First-Generation Homebuyer.--
            ``(1) In general.--In the case of a first-generation 
        homebuyer, subsection (a) shall be applied by substituting 
        `$50,000' for `$25,000'.
            ``(2) First-generation homebuyer.--For purposes of this 
        subsection, the term `first-generation homebuyer' means an 
        individual who certifies during the taxable year for which a 
        credit is allowed under subsection (a) that--
                    ``(A) no parent or legal guardian of the individual 
                (or the individual's spouse, in the case of a joint 
                return) had a majority interest in a residential 
                property at any time during the lifetime of such 
                individual (or during the lifetime of such individual's 
                spouse, as applicable), and
                    ``(B) such individual (or such individual's spouse, 
                in the case of a joint return)--
                            ``(i) aged out of the foster care system,
                            ``(ii) was emancipated from their parent or 
                        legal guardian, or
                            ``(iii) does not have a parent or legal 
                        guardian who had any ownership interest in a 
                        residential property during the 10-year period 
                        ending on the date of a purchase with respect 
                        to which a credit was allowed under subsection 
                        (a).
    ``(d) Exceptions.--No credit under subsection (a) shall be allowed 
to any taxpayer for any taxable year with respect to the purchase of a 
residence if--
            ``(1) the taxpayer is a nonresident alien,
            ``(2) the taxpayer disposes of such residence (or such 
        residence ceases to be the principal residence of the taxpayer 
        (and, if married, the taxpayer's spouse)) before the close of 
        such taxable year,
            ``(3) a deduction under section 151 with respect to such 
        taxpayer is allowable to another taxpayer for such taxable 
        year, or
            ``(4) the taxpayer fails to attach to the return of tax for 
        such taxable year a properly executed copy of the settlement 
        statement used to complete such purchase.
    ``(e) Election for Advanced Payment.--
            ``(1) In general.--At the election of the first-time 
        homebuyer, the Secretary shall transfer to a qualifying escrow 
        account an amount equal to the amount that is allowable to such 
        first-time homebuyer under subsection (a) in the present 
        taxable year.
            ``(2) Treatment of transfer.--The amount of the credit 
        allowed under subsection (a) to any taxpayer for any taxable 
        year shall be reduced (but not below zero) by the aggregate 
        amount of payments made under this subsection at the election 
        of such taxpayer during such taxable year. Any failure to so 
        reduce the credit shall be treated as arising out of a 
        mathematical or clerical error and assessed according to 
        section 6213(b)(1).
            ``(3) Qualifying escrow account.--For purposes of this 
        subsection, the term `qualifying escrow account' means an 
        escrow account established for the purchase of a principal 
        residence by a qualified first-time homebuyer that meets the 
        following requirements:
                    ``(A) Amounts in such account may only be used for 
                a down payment on a purchase with respect to which a 
                credit is allowed under subsection (a).
                    ``(B) Such account is administered by a bank (as 
                defined in section 408A(n)).
                    ``(C) The administrator of the account shall 
                transfer to the Secretary any amount in such account 
                not used under subparagraph (A) on the earlier of--
                            ``(i) the date that is 180 days after the 
                        date on which such amount was transferred to 
                        such account under paragraph (1), or
                            ``(ii) as soon as practicable upon request 
                        of the qualified first-time homebuyer.
    ``(f) Recapture of Credit.--
            ``(1) In general.--If, during any taxable year, there is a 
        recapture event with respect to any property with respect to 
        which a credit was allowed under subsection (a), then the tax 
        of the taxpayer to whom such credit was allowed under this 
        chapter for such taxable year shall be increased by an amount 
        equal to the amount of the credit that was allowed with respect 
        to such property.
            ``(2) Recapture event.--For purposes of this section, the 
        term `recapture event' means, during the 5-year period 
        beginning on the date of the purchase with respect to which a 
        credit was allowed under subsection (a)--
                    ``(A) the sale, lease to a third party, or 
                disposition of any part of the property with respect to 
                which such credit was allowed, or
                    ``(B) such property ceases to be the principal 
                residence of the taxpayer (or, in the case of a joint 
                return, of the taxpayer's spouse).
            ``(3) Exceptions.--Paragraph (1) shall not apply to any of 
        the following:
                    ``(A) Purchase of new primary residence.--
                            ``(i) In general.--A sale of a property 
                        with respect to which a credit was allowed 
                        under subsection (a) which is incident to the 
                        purchase by a taxpayer of a new primary 
                        residence if the proceeds of such sale are used 
                        to carry out the purchase of such new primary 
                        residence.
                            ``(ii) Treatment of new primary 
                        residence.--In the case of a purchase of a 
                        primary residence described in clause (i), for 
                        purposes of paragraph (1), such primary 
                        residence shall be treated as a property with 
                        respect to which a credit was allowed under 
                        subsection (a), except that the period 
                        described in paragraph (2) shall begin on the 
                        date on which the original purchase with 
                        respect to which the credit was allowed under 
                        subsection (a) occurred.
                    ``(B) Death.--Any taxable year ending after the 
                death of the taxpayer (or, in the case of a joint 
                return, of the spouse of the taxpayer).
                    ``(C) Divorce.--A transfer of a residence to which 
                section 1041(a) applies.
                    ``(D) Government orders.--A recapture event 
                relating to a principal residence occurring in 
                connection with Government orders received by such 
                individual, or such individual's spouse, for qualified 
                official extended duty service.
                    ``(E) Qualified official extended duty service.--
                For purposes of this paragraph, the term `qualified 
                official extended duty service' means service on 
                qualified official extended duty as--
                            ``(i) a member of the uniformed services,
                            ``(ii) a member of the Foreign Service of 
                        the United States, or
                            ``(iii) an employee of the intelligence 
                        community.
    ``(g) Definitions.--For purposes of this section--
            ``(1) First-time homebuyer.--The term `first-time 
        homebuyer' means any individual if such individual (and if 
        married, such individual's spouse)--
                    ``(A) had no present ownership interest in a 
                principal residence during the 10-year period ending on 
                the date of the purchase of the principal residence to 
                which this section applies,
                    ``(B) has not been allowed a credit under 
                subsection (a) for any preceding taxable year, and
                    ``(C) attests that such individual (and if married, 
                such individual's spouse) has never had a majority 
                interest in a residential property.
            ``(2) Principal residence.--The term `principal residence' 
        has the same meaning as when used in section 121.
            ``(3) Purchase.--
                    ``(A) In general.--The term `purchase' means any 
                acquisition, but only if--
                            ``(i) the property is purchased using a 
                        mortgage loan from a commercial lender,
                            ``(ii) the property is not acquired from a 
                        person related to the person acquiring such 
                        property (or, if married, such individual's 
                        spouse), and
                            ``(iii) the basis of the property in the 
                        hands of the person acquiring such property is 
                        not determined--
                                    ``(I) in whole or in part by 
                                reference to the adjusted basis of such 
                                property in the hands of the person 
                                from whom acquired, or
                                    ``(II) under section 1014(a).
                    ``(B) Construction.--A residence which is 
                constructed by the taxpayer shall be treated as 
                purchased by the taxpayer on the date the taxpayer 
                first occupies such residence.
            ``(4) Related persons.--A person shall be treated as 
        related to another person if the relationship between such 
        persons would result in the disallowance of losses under 
        section 267 or 707(b) (but, in applying section 267(b) and (c) 
        for purposes of this section, paragraph (4) of section 
        267(c)(4) shall be treated as providing that the family of an 
        individual shall include only his spouse, ancestors, and lineal 
        descendants).
    ``(h) Basis Adjustment.--For purposes of this subtitle, if a credit 
is allowed under this section in connection with any expenditure for 
any property, the increase in the basis of such property which would 
(but for this subsection) result from such expenditure shall be reduced 
by the amount of the credit so determined.
    ``(i) Inflation Adjustment.--
            ``(1) In general.--in the case of any taxable year 
        beginning after 2024, the dollar amounts in this section shall 
        be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 2023' for calendar year 2016 in 
                subparagraph (A)(ii).
            ``(2) Rounding.--If any increase under paragraph (1) is not 
        a multiple of $100, such increase shall be rounded to the 
        nearest multiple of $100.
    ``(j) Reporting.--
            ``(1) In general.--If the Secretary requires information 
        reporting under section 6045 by a person described in 
        subsection (e)(2) thereof to verify the eligibility of 
        taxpayers for the credit allowable by this section, the 
        exception provided by section 6045(e) shall not apply.
            ``(2) Information from lender.--The Secretary may require 
        any lender issuing a loan for the purchase of a property with 
        respect to which a credit is allowed under subsection (a) or 
        with respect to which a first-time homebuyer has made a request 
        for a transfer under subsection (e)(1) to provide such 
        information relating to the related purchase as the Secretary 
        determines appropriate.
    ``(k) Regulations.--The Secretary shall issue such regulations or 
other guidance as may be necessary or appropriate to carry out the 
purposes of this section.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to residences purchased in taxable years beginning after the date of 
the enactment of this Act.

SECTION 3. STARTER HOME CONSTRUCTION CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 45U. STARTER HOME CONSTRUCTION CREDIT.

    ``(a) In General.--For the purposes of section 38, the starter home 
construction credit determined under this section for any taxable year 
is an amount equal to 15 percent of the qualified home construction 
costs of the taxpayer for the taxable year.
    ``(b) Limitation.--The amount allowable as a credit under 
subsection (a) to any taxpayer for any taxable year shall not exceed 
the amount allocated to such taxpayer for the calendar year in which 
such taxable year ends under subsection (d).
    ``(c) Increase for First-Time Homebuyer.--In the case of a unit of 
housing sold to a first-time homebuyer (as defined in section 
36(g)(1)), subsection (a) shall be applied by substituting `30 percent' 
for `15 percent'.
    ``(d) Qualified Home Construction Costs.--For purposes of this 
section, the term `qualified home construction costs' means, with 
respect to a taxable year, amounts paid or incurred by the taxpayer for 
labor and material costs to construct a unit of housing placed in 
service during such taxable year--
            ``(1) the total square footage of which does not exceed 
        1200 feet, and
            ``(2) the sale price of which does not exceed 80 percent of 
        the area median home price.
    ``(e) Allocation.--
            ``(1) In general.--The aggregate starter home construction 
        credit dollar amount which a housing credit agency may allocate 
        for any calendar year is the portion of the State starter home 
        construction credit ceiling allocated under this paragraph for 
        such calendar year to such agency.
            ``(2) State ceiling initially allocated to state housing 
        credit agencies.--The State starter home construction credit 
        ceiling for each calendar year shall be allocated to the 
        housing credit agency of such State. If there is more than 1 
        housing credit agency of a State, all such agencies shall be 
        treated as a single agency.
            ``(3) State starter home credit ceiling.--The State starter 
        home credit ceiling applicable to any State for any calendar 
        year shall be an amount equal to the sum of--
                    ``(A) the unused State housing credit ceiling (if 
                any) of such State for the preceding calendar year, 
                plus
                    ``(B) $30 multiplied by the population of the State 
                (determined in accordance with section 146(j)).
            ``(4) Housing credit agency.--For purposes of this 
        subsection, the term `housing credit agency' has the meaning 
        given in section 42(h)(8)(A).
            ``(5) Inflation adjustment.--
                    ``(A) In general.--In the case of any taxable year 
                beginning after 2024, the dollar amount in paragraph 
                (3)(B) shall be increased by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        determined by substituting `calendar year 2023' 
                        for `calendar year 2016' in subparagraph 
                        (A)(ii) thereof.
                    ``(B) Rounding.--If any increase under subparagraph 
                (A) is not a multiple of $5, such increase shall be 
                rounded to the nearest multiple of $5.
    ``(f) Basis Adjustment.--For purposes of this subtitle, if a credit 
is allowed under this section in connection with any expenditure for 
any property, the increase in the basis of such property which would 
(but for this subsection) result from such expenditure shall be reduced 
by the amount of the credit so determined.
    ``(g) Regulations.--The Secretary shall issue such regulations or 
other guidance as may be necessary or appropriate to carry out the 
purposes of this section.''.
    (b) Credit To Be Part of General Business Credit.--Section 38(b) of 
such Code is amended by striking ``plus'' at the end of paragraph (32), 
by striking the period at the end of paragraph (33) and inserting ``, 
plus'', and by adding at the end the following new paragraph:
            ``(34) the starter home construction credit determined 
        under section 45U(a).''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by 
inserting after the item relating to section 45T the following new 
item:

``Sec. 45U. Starter home construction credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this section.
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