It’s hard enough for many would-be homebuyers to ‘build’ the American dream. That house with the white picket fence simply comes at a cost many first-time homebuyers can’t afford.  It’s even more difficult in times where the population grows faster than the housing supply, leaving many looking to buy their first home with few options.

The first-time homebuyer tax credit, implemented under the Obama administration, came about in 2008 as a result of the 2008 Housing and Economic Recovery Act. It sought to encourage and entice Americans to buy a home, thereby utilizing a tax credit worth up to $7,500. Unfortunately, the credit doesn’t exist anymore, and a 15-year repayment through federal taxes became mandatory.

However, homeowners shouldn’t be discouraged. There are tax credits available for first-time buyer loans, not to mention other programs that can help obtain a first mortgage.

A Brief History of the First Time Home Buyer Tax Credit

One of the more common questions would-be homebuyers tend to ask Google is this: What is a homebuyer credit? They also ask, “Is there a first-time homebuyer credit?” or “Do I get a tax break for buying a home?”

Unfortunately, it’s been more than a decade since Congress has crafted legislation aiding the first-time buyer. It passed the American Recovery and Reinvestment Act of 2009, including a tax credit. It gave anyone buying their first home, or those who had not been homeowners for at least three years, a tax credit worth up to $8,000. According to the U.S. Government Accountability Office, some 2.3 million people took advantage of the stimulus, at a cost to the government of more than $16 billion.

When that tax-credit program ended in late 2010, things looked a lot different. ‘Credits’ either had to be gifted to a buyer or became a loan that had to be repaid. But today, incentives and tax credits for homebuyers do exist in various forms if you know how to find them.

Tax Deductions You Can Claim as a Homeowner

There are numerous tax benefits to homeownership, but typically, first-time buyers don’t have to worry about rental income (which is not taxed) or the capital gains tax from the sale of a home.

What first-time buyers can look forward to during tax season is being able to deduct mortgage interest and property tax payments. Unfortunately, the Tax Cuts and Jobs Act (TCJA) of 2017 cut back the mortgage interest tax break for homeowners by limiting the deduction and putting a cap on the property taxes paid that taxpayers can deduct.

Overall, the Tax Policy Center found the mortgage interest and property tax deductions available to homeowners benefit those taxpayers in a higher tax bracket more than those in lower brackets. For example, it showed that deducting $2,000 for property taxes saved a taxpayer in a top tax bracket $740, but saved a taxpayer in a lower bracket only $440.

Beyond these tax benefits, buyers can take a deduction for mortgage points (or prepaid interest), or take advantage of the home office deduction, which allows homeowners to deduct $5 per square foot of home office space. The downside? The full deduction is limited to $1,500.

Finally, there are some deductions out there for improving a home or making it home more energy-efficient, but each one likely has specific requirements and deadlines for homeowners to receive any possible tax breaks. That means anyone thinking of adding new windows, an energy-efficient HVAC system, or solar panels will need to see if these items qualify before trying to claim them on a tax return.

Other Tax and Finance Tips for Homebuyers

A little-known program called The Mortgage Credit Certificate Program provides the ability for first-time buyers to get a break on their mortgage interest. According to the IRS, the program is intended to help lower-income individuals, and not everyone will qualify. But unlike a deduction, those who do qualify will see their taxable income reduced, with the credit counted directly against their tax bill, thereby lowering the amount owed.

To get this credit, first-time homebuyers need to obtain a Mortgage Credit Certificate from their state or local government. The certificate includes pertinent mortgage details, such as the amount of interest that can be claimed as a credit. With the certificate, homeowners qualify for the credit every year and can claim it using IRS Form 8396.

Those looking for other tax breaks can withdraw from an individual retirement account (or IRA) to use the money for a down payment. If it’s a traditional IRA, there will be income tax on the withdrawal, but no penalty. If it’s a Roth IRA, there is no income tax levied on the withdrawal because it was paid when the money was first moved into the account.

First-time homebuyers can also borrow money from a 401k, but they’ll be obligated to pay it back.

Where to Find First-Time Credits Now

Although first-time buyers are out of luck with a big federal tax credit right now, they can find first-time homebuyer programs and incentives offered through the state — depending on where they live — that will help out before tax season. Most

Here’s an example of the kind of programs someone can take advantage of in Pennsylvania: The Commonwealth has a lot of help on the table for both first-time homebuyers and others when it comes to locking in an affordable mortgage. The Pennsylvania Housing Finance Agency (PHFA) partners with lenders and brokers to offer mortgages with lower fees and interest rates.  PHFA actually purchases the loans directly after closing, and borrowers make their monthly payments directly to the agency.

In neighboring New York, the State of New York Mortgage Agency (SONYMA) lets a first-time homebuyer borrow up to 3% of the purchase price through a 0% APR loan. There are NO monthly payments on the loan and it’s forgiven if the homeowner remains in the home for 10 years.

In the South, states like Texas have become well-known for aiding first-time buyers in need, especially those who have had credit problems or found it difficult to save up for a large down payment. In the Lone Star State, there are two budget-friendly purchase money mortgage options including a program called “My First Texas Home.” It offers down payment and closing cost assistance worth up to 5% of the mortgage and can be combined with the Texas Mortgage Credit Certificate Program for further benefits.

Out west, California’s first-time homebuyer program is unique for one specific reason — it qualifies both true ‘first-time buyers’ and those who previously purchased a home but have been out of the property a minimum of three years. The program through the California Housing Finance Agency states anyone in this situation is “back to being a first-time homebuyer again,” and can take advantage of all the benefits of the program.

These are just a few examples of the ways someone can find help as a first-time homebuyer, not necessarily through tax incentives in the year after buying the home, but by taking advantage of help during the process. With that said, it’s is up to the consumer to do the research and find out the specifics of these programs.

The Bottom Line on First Time Home Buyer Tax Credits

There are a lot of tax breaks, incentives, and programs available for first-time homebuyers. However, every situation is different and the benefits will vary for each homebuyer. It’s best to consult a tax professional or financial advisor if you’re really interested in learning more about what makes the prospect of buying a home both attractive and lucrative.