FirstHomes Tax Credit

The FirstHomes Tax Credit is a great option to help new homebuyers save a little extra money.

The FirstHomes Tax Credit program provides qualified first-time Rhode Island homebuyers and those buying in targeted areas of the state with a mortgage credit certificate which can be used as a dollar-for-dollar tax credit of up to $2,000 against their federal tax liability for the life of their loan.

The FirstHomes Tax Credit:

  • Offers extra tax savings for eligible borrowers
  • Reduces a borrower’s federal tax liability
  • Can be claimed each year for the life of the mortgage
  • Is also available to select, non first-time homebuyers (in targeted areas)

Tax benefits for homeowners

The FirstHomes Tax Credit is not a loan. It is a tax credit – claimed by borrowers on their federal tax return annually. The credit is equal to 20% of the total mortgage interest amount paid – up to $2,000 each year.

The remaining mortgage interest that a borrower pays each year can be claimed as an itemized tax deduction, further reducing the homeowner’s federal tax liability.

Credit can be claimed yearly
The tax credit can be claimed for the life of the mortgage, as long as the borrower continues to live in the home. This allows a borrower’s savings to really add up over time.

Eligibility
First-time homebuyers borrowing through Rhode Island Housing or a FirstHomes Tax Credit Approved Lender are eligible to apply for this credit. The credit is also available to non first-time homebuyers purchasing in select areas of Providence, Pawtucket, Central Falls and Woonsocket. The borrower must own and occupy the home as their principal residence.

Maximum Purchase Price
The FirstHomes Tax Credit can be used for homes with a maximum purchase price of $407,195 for a one- to four-family home or eligible condominium.

Income limits
To be eligible for the FirstHomes Tax Credit, your total annual household income must be less than $89,280 (for a 1-2 person household) or $104,160 (for a 3+ person household).

Availability
The FirstHomes Tax Credit can be used in conjunction with a Rhode Island Housing FirstHomes mortgage, or with a mortgage offered by a FirstHomes Tax Credit Approved Lender. While administered by Rhode Island Housing, the FirstHomes Tax Credit program is available to all lending institutions, so contact a FirstHomes Tax Credit Approved Lender today for more details. This tax credit is available for select loan products.

TAKE THE NEXT STEP

Contact a Mortgage Specialist or FirstHomes Tax Credit Approved Lender
If you have questions about the FirstHomes Tax Credit or would like to begin the application process, contact one of our Mortgage Specialists or FirstHomes Tax Credit Approved Lenders today.
CONTACT A MORTGAGE SPECIALIST 
FIND A FIRSTHOMES TAX CREDIT APPROVED LENDER