$8000 First-Time Home Buyer Ends November 30!

All summer long we've been hearing about the first-time home buyer credit, and while quite a few have taken advantage of it, there are still some on the fence as to whether they should jump in yet or not. Well, to all you fence sitters, you have less than 90 days now, to find a home, make an offer and go to closing. Let's take a quick look at the program.


Congress passed legislation that grants a tax credit of up to $8000 to first -time home buyers in an effort to help the down turned economy. So who qualifies? First-time home buyers who purchase by December 1, 2009 qualify based on the fact that his or her spouse did not own a residence during the three years prior to the purchase. So technically you do not have to be a first-time home buyer. You just have to have not owned a home for at least three years prior to buying one now. This $8000 tax credit can be applied to primary residence which would include single-family homes, condos, town homes and co-ops.


So how much if all of the $8000 tax credit do you get? The credit is equal to 10% of the purchase price of the home, maxing out at $8000. So basically you have to buy a home that costs $80,000 or more. Not to hard to still find today, even with the decreased market value. Part two to that equation is that the buyer's income, if single $75,000 and married couples $150,000 max respectively to qualify. So you say, "What if I earn more than that? Am I punished and discouraged from buying a home?" Well not exactly, if you're single and make between $75K and $95K you can still get the tax credit, it just decreases. Same goes for married couples whose joint income is between $150K and $170K. If you make more than that, sorry, it's a no go with the Tax-Credit.


So you're going to get the tax credit. The next two things you should be asking is, how is it applied and do I have to pay it back? The answer to the first question is that you don't actually receive $8000 off the purchase price of the house. You will see the tax-credit at well, tax time. When you file in April of 2010, the tax-credit will be applied then. Do you have to pay it back? No, not this time, unless...you sell your home anytime during the three-year period following the purchase of your home, then Uncle Sam will take back the credit at the time of closing. Once again, you wait for money, Uncle Sam doesn't.

All in all a good program if you are in a position to take advantage of it. Talk to your Realtor or lender to get more details.





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