Can You Use the Help to Buy Scheme Twice?

Government-backed programs aim to make homeownership more accessible. These initiatives are designed to alleviate financial burdens associated with purchasing property, such as down payments or initial costs. While many countries offer housing assistance, specific rules and availability differ significantly by region. Understanding the purpose and limitations of such schemes is important, especially when considering if a program can be utilized more than once.

General Principles of Homebuyer Assistance Programs

The term “Help to Buy” refers to specific government schemes primarily available in the United Kingdom. While these programs are largely closed to new applications, the United States offers its own array of homebuyer assistance initiatives at federal, state, and local levels. These US programs share a common goal: to help individuals achieve homeownership, particularly first-time buyers or those meeting specific income criteria.

Most assistance programs provide a one-time benefit to help secure a primary residence. However, the definition of a “first-time homebuyer” for many US programs can allow for re-qualification under certain circumstances.

Down Payment and Shared Equity Programs: Re-use Considerations

Many US homeownership support initiatives take the form of down payment assistance (DPA) or shared equity programs. DPA programs provide funds to cover part or all of a buyer’s down payment and often closing costs, reducing the initial cash outlay. These funds can be structured as grants, forgivable loans, or deferred loans with payments postponed until a future event like selling or refinancing.

Eligibility for DPA programs requires participants to be first-time homebuyers. However, many programs consider someone a first-time homebuyer if they have not owned a primary residence in the last three years. This three-year look-back period means individuals who previously owned a home may qualify for such assistance again.

Shared equity programs involve a housing authority or non-profit taking an equity stake in the property, reducing the buyer’s initial mortgage amount. These programs maintain long-term affordability by restricting the home’s resale price, often requiring the homeowner to share a portion of appreciated value with the program upon sale. While these programs help make homeownership accessible, their structure limits personal wealth accumulation from appreciation and is tied to the specific property.

Therefore, a previous shared equity benefit is tied to the original property. Acquiring a new home typically requires meeting eligibility for a new program, often including being a first-time homebuyer or meeting specific income thresholds.

Homebuyer Savings and Tax Credit Programs: One-Time Benefits

Beyond direct financial assistance, some US programs offer incentives through tax-advantaged savings accounts or tax credits to support homeownership. Certain states offer first-time homebuyer savings accounts (FHSAs), allowing individuals to save for a down payment and closing costs with potential state tax benefits. These accounts are designed to encourage initial home savings and are limited to one use per individual for their first home purchase. Once funds are withdrawn and used for a qualifying home purchase, the tax benefits associated with that specific account are fulfilled.

Federal tax credits, such as the Mortgage Credit Certificate (MCC) program, aim to reduce the tax burden for qualifying homebuyers. An MCC allows a homeowner to claim a portion of their annual mortgage interest as a direct dollar-for-dollar credit against their federal income tax liability, up to $2,000 annually. While an MCC can provide ongoing annual tax savings, the certificate is issued once for a specific home purchase and cannot be re-issued for subsequent homes. Past federal first-time homebuyer tax credits were one-time benefits that have since expired.