I 
119TH CONGRESS 
1ST SESSION H. R. 3475 
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 
MAY 17, 2025 
Mr. FITZPATRICK (for himself and Mr. GOLDEN of Maine) 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 Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the‘‘ Bipartisan American 
Homeownership Opportunity Act of 2025’’. 
SEC. 2. FIRST-TIME HOMEBUYER CREDIT. 
(a) IN GENERAL.—Section 36 of the Internal Rev-
enue Code of 1986 is amended to read as follows: 
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‘‘SEC. 36. FIRST-TIME HOMEBUYER CREDIT. 
‘‘(a) IN GENERAL.—ln 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 
$50,000. 
‘‘(b) LIMITATION.— 
‘‘(1) IN GENERAL.—The amount allowable as a 
credit under subsection (a) (determined without re-
gard 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 al-
lowable 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— 
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‘‘(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 in-
dividual. 
‘‘(3) MODIFIED
ADJUSTED
GROSS
INCOME.— 
For purposes of paragraph (1), the term ‘modified 
adjusted gross income’ means the adjusted gross in-
come of the taxpayer for the taxable year increased 
by any amount excluded from gross income under 
section 911, 931, or 933. 
‘‘(c) 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 
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of the settlement statement used to complete such 
purchase. 
‘‘(d) 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 home-
buyer 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 pay-
ments 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 ac-
cording to section 6213(b)(1). 
‘‘(3) QUALIFYING ESCROW ACCOUNT.—For pur-
poses 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 re-
quirements: 
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‘‘(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 sub-
section (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 trans-
ferred to such account under paragraph 
(1), or 
‘‘(ii) as soon as practicable upon re-
quest of the qualified first-time homebuyer. 
‘‘(e) RECAPTURE OF CREDIT.— 
‘‘(1) IN GENERAL.—lf, during any taxable year, 
there is a recapture event with respect to any prop-
erty 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. 
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‘‘(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 dis-
position of any part of the property with respect 
to which such credit was allowed, or 
‘‘(B) such property ceases to be the prin-
cipal 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 RESI-
DENCE.— 
‘‘(i) IN GENERAL.—A sale of a prop-
erty with respect to which a credit was al-
lowed under subsection (a) which is inci-
dent to the purchase by a taxpayer of a 
new primary residence if the proceeds of 
such sale are used to carry out the pur-
chase of such new primary residence. 
‘‘(ii) TREATMENT OF NEW PRIMARY 
RESIDENCE.—ln the case of a purchase of 
a primary residence described in clause (i), 
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for purposes of paragraph (1), such pri-
mary residence shall be treated as a prop-
erty with respect to which a credit was al-
lowed 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 para-
graph, the term ‘qualified official extended duty 
service’ means service on qualified official ex-
tended duty as— 
‘‘(i) a member of the uniformed serv-
ices, 
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‘‘(ii) a member of the Foreign Service 
of the United States, or 
‘‘(iii) an employee of the intelligence 
community. 
‘‘(f) 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 prin-
cipal 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 prop-
erty. 
‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin-
cipal residence’ has the same meaning as when used 
in section 121. 
‘‘(3) PURCHASE.— 
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‘‘(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 individ-
ual’s spouse), and 
‘‘(iii) the basis of the property in the 
hands of the person acquiring such prop-
erty is not determined— 
‘‘(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). 
‘‘(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 relation-
ship between such persons would result in the dis-
allowance of losses under section 267 or 707(b) (but, 
in applying section 267(b) and (c) for purposes of 
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this section, paragraph (4) of section 267(c)(4) shall 
be treated as providing that the family of an indi-
vidual shall include only his spouse, ancestors, and 
lineal descendants). 
‘‘(g) BASIS ADJUSTMENT.—For purposes of this sub-
title, 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 sub-
section) result from such expenditure shall be reduced by 
the amount of the credit so determined. 
‘‘(h) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any taxable 
year beginning after 2025, 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 deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins, deter-
mined by substituting ‘‘calendar year 2023’’ for 
calendar year 2016 in subparagraph (A)(ii). 
‘‘(2) ROUNDING.—lf any increase under para-
graph (1) is not a multiple of $100, such increase 
shall be rounded to the nearest multiple of $100. 
‘‘(i) REPORTING.— 
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‘‘(1) IN GENERAL.—lf the Secretary requires in-
formation reporting under section 6045 by a person 
described in subsection (d)(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 Sec-
retary 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 (d)(1) to provide such 
information relating to the related purchase as the 
Secretary determines appropriate. 
‘‘(j) REGULATIONS.—The Secretary shall issue such 
regulations or other guidance as may be necessary or ap-
propriate 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. 
SEC. 3. STARTER HOME CONSTRUCTION CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
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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 per-
cent of the qualified home construction costs of the tax-
payer 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.—ln 
the case of a unit of housing sold to a first-time home-
buyer (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 con-
struction 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 
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‘‘(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 con-
struction credit ceiling allocated under this para-
graph 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 cal-
endar year shall be allocated to the housing credit 
agency of such State. If there is more than 1 hous-
ing 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 ceil-
ing (if any) of such State for the preceding cal-
endar year, plus 
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