I 
110TH CONGRESS 
2D SESSION 
H. R. 5643 
To amend the Internal Revenue Code of 1986 to allow a refundable credit 
against income tax for the purchase of a principal residence by a first- 
time homebuyer. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 14, 2008 
Mr. ALLEN (for himself, Mr. BURTON of Indiana, Mr. CARNAHAN, Ms. GIF-
FORDS, Mr. DOYLE, Mr. DAVIS of Illinois, and Ms. BORDALLO) intro-
duced the following bill; which was referred to the Committee on Ways 
and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to allow a 
refundable credit against income tax for the purchase 
of a principal residence by a first-time homebuyer. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘First-Time Home-
buyers’ Tax Credit Act of 2008’’. 
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SEC. 2. REFUNDABLE CREDIT FOR FIRST-TIME HOME-
BUYERS. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to refundable credits) is amended by redes-
ignating section 36 as section 37 and by inserting after 
section 35 the following new section: 
‘‘SEC. 36. PURCHASE OF PRINCIPAL RESIDENCE BY FIRST- 
TIME HOMEBUYER. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual who is a first-time homebuyer of a principal resi-
dence in the United States during any taxable year, there 
shall be allowed as a credit against the tax imposed by 
this subtitle for the taxable year an amount equal to 10 
percent of the purchase price of the residence. 
‘‘(b) LIMITATIONS.— 
‘‘(1) MAXIMUM DOLLAR AMOUNT.— 
‘‘(A) IN
GENERAL.—The credit allowed 
under subsection (a) shall not exceed the excess 
(if any) of— 
‘‘(i) $3,000 (2 times such amount in 
the case of a joint return), over 
‘‘(ii) the credit transfer amount deter-
mined under subsection (c) with respect to 
the purchase to which subsection (a) ap-
plies. 
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‘‘(B) INFLATION
ADJUSTMENT.—In the 
case of any taxable year beginning after Decem-
ber 31, 2008, the $3,000 amount under sub-
paragraph (A) shall be increased by an amount 
equal to $3,000, multiplied by the cost-of-living 
adjustment determined under section 1(f)(3) for 
the calendar year in which the taxable year be-
gins by substituting ‘2007’ for ‘1992’ in sub-
paragraph (B) thereof. If the $3,000 amount as 
adjusted under the preceding sentence is not a 
multiple of $10, such amount shall be rounded 
to the nearest multiple of $10. 
‘‘(2) TAXABLE INCOME LIMITATION.— 
‘‘(A) IN GENERAL.—If the taxable income 
of the taxpayer for any taxable year exceeds the 
maximum taxable income in the table under 
subsection (a), (b), (c), or (d) of section 1, 
whichever is applicable, to which the 25 percent 
rate applies, the dollar amounts in effect under 
paragraph (1)(A)(i) for such taxpayer for the 
following taxable year shall be reduced (but not 
below zero) by the amount of the excess. 
‘‘(B) CHANGE IN RETURN STATUS.—In the 
case of married individuals filing a joint return 
for any taxable year who did not file such a 
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joint return for the preceding taxable year, sub-
paragraph (A) shall be applied by reference to 
the highest taxable income of either such indi-
vidual for the preceding taxable year. 
‘‘(c) TRANSFER OF CREDIT.— 
‘‘(1) IN GENERAL.—A taxpayer may transfer 
all or a portion of the credit allowable under sub-
section (a) to 1 or more persons as payment of any 
liability of the taxpayer arising out of— 
‘‘(A) the downpayment of any portion of 
the purchase price of the principal residence, 
and 
‘‘(B) closing costs in connection with the 
purchase (including any points or other fees in-
curred in financing the purchase). 
‘‘(2) CREDIT TRANSFER MECHANISM.— 
‘‘(A) IN
GENERAL.—Not less than 180 
days after the date of the enactment of this sec-
tion, the Secretary shall establish and imple-
ment a credit transfer mechanism for purposes 
of paragraph (1). Such mechanism shall require 
the Secretary to— 
‘‘(i) certify that the taxpayer is eligi-
ble to receive the credit provided by this 
section with respect to the purchase of a 
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principal residence and that the transferee 
is eligible to receive the credit transfer, 
‘‘(ii) certify that the taxpayer has not 
received the credit provided by this section 
with respect to the purchase of any other 
principal residence, 
‘‘(iii) 
certify 
the 
credit 
transfer 
amount which will be paid to the trans-
feree, and 
‘‘(iv) require any transferee that di-
rectly receives the credit transfer amount 
from the Secretary to notify the taxpayer 
within 14 days of the receipt of such 
amount. 
Any check, certificate, or voucher issued by the 
Secretary pursuant to this paragraph shall in-
clude the taxpayer identification number of the 
taxpayer and the address of the principal resi-
dence being purchased. 
‘‘(B) TIMELY
RECEIPT.—The Secretary 
shall issue the credit transfer amount not less 
than 30 days after the date of the receipt of an 
application for a credit transfer. 
‘‘(3) PAYMENT OF INTEREST.— 
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‘‘(A) IN GENERAL.—Notwithstanding any 
other provision of this title, the Secretary shall 
pay interest on any amount which is not paid 
to a person during the 30-day period described 
in paragraph (2)(B). 
‘‘(B) AMOUNT
OF
INTEREST.—Interest 
under subparagraph (A) shall be allowed and 
paid— 
‘‘(i) from the day after the 30-day pe-
riod described in paragraph (2)(B) to the 
date payment is made, and 
‘‘(ii) at the overpayment rate estab-
lished under section 6621. 
‘‘(C) EXCEPTION.—This paragraph shall 
not apply to failures to make payments as a re-
sult of any natural disaster or other cir-
cumstance beyond the control of the Secretary. 
‘‘(4) EFFECT ON LEGAL RIGHTS AND OBLIGA-
TIONS.—Nothing in this subsection shall be con-
strued to— 
‘‘(A) require a lender to complete a loan 
transaction before the credit transfer amount 
has been transferred to the lender, or 
‘‘(B) prevent a lender from altering the 
terms of a loan (including the rate, points, fees, 
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and other costs) due to changes in market con-
ditions or other factors during the period of 
time between the application by the taxpayer 
for a credit transfer and the receipt by the 
lender of the credit transfer amount. 
‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) FIRST-TIME HOMEBUYER.— 
‘‘(A) IN GENERAL.—The term ‘first-time 
homebuyer’ has the same meaning as when 
used in section 72(t)(8)(D)(i). 
‘‘(B) ONE-TIME ONLY.—If an individual is 
treated as a first-time homebuyer with respect 
to any principal residence, such individual may 
not be treated as a first-time homebuyer with 
respect to any other principal residence. 
‘‘(C) 
MARRIED
INDIVIDUALS
FILING 
JOINTLY.—In the case of married individuals 
who file a joint return, the credit under this 
section is allowable only if both individuals are 
first-time homebuyers. 
‘‘(D) OTHER TAXPAYERS.—If 2 or more 
individuals who are not married purchase a 
principal residence— 
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‘‘(i) the credit under this section is al-
lowable only if each of the individuals is a 
first-time homebuyer, and 
‘‘(ii) the amount of the credit allowed 
under subsection (a) shall be allocated 
among such individuals in such manner as 
the Secretary may prescribe, except that 
the total amount of the credits allowed to 
all such individuals shall not exceed the 
amount 
in 
effect 
under 
subsection 
(b)(1)(A) for individuals filing joint re-
turns. 
‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin-
cipal residence’ has the same meaning as when used 
in section 121. Except as provided in regulations, an 
interest in a partnership, S corporation, or trust 
which owns an interest in a residence shall not be 
treated as an interest in a residence for purposes of 
this paragraph. 
‘‘(3) PURCHASE.— 
‘‘(A) IN GENERAL.—The term ‘purchase’ 
means any acquisition, but only if— 
‘‘(i) the property is not acquired from 
a person whose relationship to the person 
acquiring it would result in the disallow-
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ance 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) shall be treated as pro-
viding that the family of an individual shall 
include only the individual’s spouse, ances-
tors, and lineal descendants), and 
‘‘(ii) the basis of the property in the 
hands of the person acquiring it is not de-
termined— 
‘‘(I) in whole or in part by ref-
erence to the adjusted basis of such 
property in the hands of the person 
from whom acquired, or 
‘‘(II) under section 1014(a) (re-
lating to property acquired from a de-
cedent). 
‘‘(B) CONSTRUCTION.—A residence which 
is constructed by the taxpayer shall be treated 
as purchased by the taxpayer. 
‘‘(4) PURCHASE
PRICE.—The term ‘purchase 
price’ means the adjusted basis of the principal resi-
dence on the date of acquisition (within the meaning 
of section 72(t)(8)(D)(iii)). 
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‘‘(e) DENIAL OF DOUBLE BENEFIT.—No credit shall 
be allowed under subsection (a) for any expense for which 
a deduction or credit is allowed under any other provision 
of this chapter. 
‘‘(f) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is allowed under this section with respect 
to the purchase of any residence, the basis of such resi-
dence shall be reduced by the amount of the credit so al-
lowed. 
‘‘(g) PROPERTY TO WHICH SECTION APPLIES.— 
‘‘(1) IN GENERAL.—The provisions of this sec-
tion apply to a principal residence if— 
‘‘(A) the taxpayer purchases the residence 
on or after January 1, 2008, and before Janu-
ary 1, 2013, or 
‘‘(B) the taxpayer enters into, on or after 
January 1, 2008, and before January 1, 2013, 
a binding contract to purchase the residence, 
and purchases and occupies the residence before 
July 1, 2014.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Subsection (a) of section 1016 of the Inter-
nal Revenue Code of 1986 (relating to general rule 
for adjustments to basis) is amended by striking 
‘‘and’’ at the end of paragraph (36), by striking the 
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period at the end of paragraph (37) and inserting ‘‘, 
and’’, and by adding at the end the following new 
paragraph: 
‘‘(38) in the case of a residence with respect to 
which a credit was allowed under section 36, to the 
extent provided in section 36(f).’’. 
(2) Section 1324(b)(2) of title 31, United 
States Code, is amended by inserting ‘‘or 36’’ after 
‘‘section 35’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by strik-
ing the item relating to section 36 and inserting the fol-
lowing new items: 
‘‘Sec. 36. Purchase of principal residence by first-time homebuyer. 
‘‘Sec. 37. Overpayments of tax.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
Æ 
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