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.

HR3548 Home Buyer Tax Credit

This is Great news for the housing market. HR3548, the extension of the first time home buyer's tax credit was passed in both the House and the Senate. The Senate passed it 98 to 0 and the House passed it 403 to 12.

The income limits are $125,000 for single applicants and $225,000 for joint applicants. The maximum purchase price is $800,000.

My advice to you is this. If you are contemplating about taking advantage of this tax credit, ... Don't sit on the fence. Do it Now, or at least start by the first of the year. There is a time limit.

You must have a contract by 4/30/10 and your loan must close by 7/1/10. This is not much time. It take two to three Months to close a loan in today's market.

There are only three options for a "no down payment" or 100% LTV loan: FHA, VA, and USDA Rural Development Guaranteed or Direct Mortgage. These organizations are overwhelmed by the shear number of applications because they are the only 100% loans on the market right now.

These organizations are way understaffed and there is no option to hire. This is the Government, and there is no budget to hire more people.

Buyers and Sellers should be aware of this and make sure their contract reflects two to three months to close the loan. This is not a joke.

So, take advantage of HR3548 but start now, don't wait.

Good Luck.

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!