The government has provided a terrific incentive to purchase a home as soon as possible. Here’s the basic information about the credit. There is continuing review of this program. Some of the items currently being considered are extending the qualifying date and opening the program to all purchasers of a primary residence. Please check back for further updates.
- It is for first time home buyers only. Anyone who has not owned a primary residence in the last 3 years is considered a first time buyer for this credit.
- If a couple is married, they must both qualify as first time home buyers, even if only one of them is on the mortgage or title.
- The credit is 10% of the purchase price of the home, up to a maximum of $8000
- There are income restrictions to qualify for the full tax credit. The income used for this purpose is the modified adjusted gross income. The maximum income for a single individual is $75,000. The maximum income for a married couple is $150,000. If your income is above these levels, you MAY qualify for a partial credit.
- You must CLOSE ESCROW on or before November 30, 2009. If building a new home, you must take occupancy prior to December 1, 2009.
- The credit applies ONLY to your primary residence.
- The approval has been given to allow a “bridge loan” to buyers so they may use the credit for closing costs or a larger downpayment. The buyer still needs to meet the normal downpayment requirement with cash.
- The buyer must keep the property as a primary residence for 3 years. If the property is sold or converted to other than a primary residence, the credit needs to be repaid.
To read the NAHB FAQ sheet, click here: http://www.federalhousingtaxcredit.com/2009/faq.php
