My son bought a home 2 yrs ago as a 1st time home buyer. Now he is getting married and the home is not large?

He is not exactly between a rock and a hard place. He will simply have to sell his present home to buy his next home much like any other person. If he received the tax credit offered by the government he will need to repay it. His mortgage may be assumable, but if it is the person assuming the mortgage would have to meet the same borrowing requirements as the original borrower to free it as an active lien on your son's credit report (a mortgage is a lien). If you can assume the mortgage, or your son can sell the home to another, you can gift your son money for a down payment up to $13,000 without paying a gift tax. If you are still married you and you husband can gift your son separately for a total of $26,000