Saturday, April 11, 2009

First Time Home Buyer Tax Credit

This 2009 home buyer tax credit is really a great thing but there is a time limit so you should act on it as soon as possible. Many people don't understand the requirements so I have summarized them below. The first time homebuyer tax credit is $8,000 so you should sit up and pay attention.

Time Frame:
For your first-time home buyer purchase to qualify for the $8,000 Tax Credit you must purchase and close the loan on your new home between January 1st 2009 and December 1st 2009.

Home Owner Eligibility:
All United States Citizens may participate if they pay federal taxes, and are first time home buyers. A first time homebuyer is an individual that has not owned a home in three years.

Types of Homes:
The main factor is that your purchased home is your primary residence. It can be a condo or town house or single family, new or used.

If you sell your new home within three years you will have to repay the first time home buyer tax credit. That is the only repayment provision.

This tax credit is cash in hand. By that I mean that it is refundable so to speak. If you owe $2,000 in taxes you pay them nothing and you will receive $6,000 back from the government. Or, ... if the government owes you $2000 you will receive $10,000. (2,000 + 8,000)

There are income limits and the details can get a little confusing. To put it simply, if you are single, your adjusted income cannot exceed $75,000. $75,000 - 95,000 you can still get a partial credit.

If you are married, filing jointly the max adjusted income is $150,000. $150,000 - $170,000 you can get a partial credit.

As a first time home buyer you can take your tax credit on your 2008 0r 2009 tax filing.

It's all good so go out and buy that new home!


  1. Although a loan does not start out as income to the borrower, it becomes income to the borrower if the borrower is discharged of indebtedness.

  2. Thanks for sharing such a useful information:

  3. The Tax Credit has been extended for 2010. However, you need to hurry because you must be in a contract by April 30th.

  4. Which other first time buyer programs are available? How long will the 3.5% down payment last? Has any one heard of a extension or cut off date for the 3.5%dwn payment?

  5. The 3.5% is FHA and it could change soon as they have just came out with minimum credit score requirements and increased mortgage insurance premiums.
    There are rumors that the down payment will increase to 5% soon.
    Check for FHA guidelines