H.R.3548 Home Buyer Tax Credit Extended and Revised

The First Time Home buyer Tax Credit was Extended by the President in Novemver of 2009.  This is not breaking news by any means.  However, there is a lot of confusion by consumers and lenders.  I guess the confusion is because H.R. 3548 was also revised or change to include current home owners.

I have the facts listed below along with points of confusion and creative thoughts you may want to avoid.

• The bill extends the present $8,000 tax credit (up to 10% of purchase price) for first-time home buyers through April 30, 2010.  A first time home buyer is one that has not owned a home in the last 3 years.
• The bill has been revised to allow Current homeowners a $6,500 tax credit (up to 10% of purchase price) through April 30, provided they have lived in the home they are selling, or have sold, as principal residence for five consecutive years in the past eight years.
• The April 30th deadline is very confusing for some. If the potential home buyers have a binding contract on or before April 30th, they will have until July 1st to close the transaction.
• Income limits for eligible home buyers are expanded to $125,000 for single buyers and $225,000 for couples.
• The purchase price of the home cannot exceed $800,000. To help guard against fraud, buyers are required to attach documentation of purchase to their tax return.
• Home types include: single family home, condos, town homes, mobile homes, house boats and co-ops.
• The tax credit is not a deduction. The refund is paid to you in excess of taxes owed.
• There is no repayment required as long as you live in your new home for a minimum of 3 years.
• The HUD-1 or settlement statement/statements must be submitted with your tax return. (form 5405)
• This is important, ... you must by 18 years or older and NOT be claimed as a dependent by another tax payer.
• Don't get bitten by this provision. Your purchase CANNOT BE from a fimily member such as parents, children, siblings, or spouse.

Sounds simple doesn't it?  Maybe not so much..  I caution you not to wait till the last minute.  Most lenders do take two to three months to close a loan right now.

Good Luck.