U.S Residents $8,000 First-Time Homebuyer Tax Credit
Author: Hans Anderson // Category: Various Posts*Is there a time limit to purchase to qualify?
When you buy a home between Jan. 1 and Dec. 1 this year (2009) and close escrow during these dates, you will qualify for an $8,000 tax credit. Remember it has to be your primary residence and you meet the simple requirements.
*In the eyes of the law what is considered a “first-time homebuyer”?
The law defines “first-time homebuyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase.
*Are there any other requirements to qualify?
If your a U.S. citizen who files taxes you are eligible to participate. There is an income limit of $75,000 a year for individuals and you can’t go over $150,000 a year for joint filers.
*How do I apply for the credit?
You should use IRS Tax Form 5450 to claim the first-time home buyer tax credit.
*Does the credit have to be repaid? No it doesn’t.
Unlike a similar tax credit passed in 2008, this $8,000 tax credit does not have to be repaid to the IRS.
*Can I use the tax credit toward a down payment or other closing costs?
Yes. An announcement made May 29 allows the tax credit to be used toward purchase costs of a home, including down payment in some cases. This can be done one of two ways. First, buyers using an FHA-approved lender can sell their anticipated tax credit to the lender and use the proceeds to immediately apply the tax credit to any down payment above the minimum down payment of 3.5 percent required with FHA-insured mortgages. Second, buyers who receive financing through state housing finance agencies and certain non-profits will be able to use the tax credit for their down payments via a tax credit advance loan that does not result in any cash back to the buyer.
It’s a good idea to contact your local IRA branch to verify that nothing has changed from what I posted here.
Hans Anderson
