Another Incentive to Purchase a Home Now
October 27,2008
The Housing and Recovery Act of 2008 seems to be filled with incentives to restart the housing markets. One of the provisions is a tax credit for first time home buyers in an amount up to $7500. Since the passage of the act, there have many many questions concerning who is eligible?; what is the credit?;, how exactly will it be processed?
Here is a brief outline:
A "first time homebuyer" is defined as a buyer who has not owned a principal residence during the 3 year period prior to the purchase. First time homebuyers purchasing any kind of home - new or resale- may be eligible.
There are income limits that purchasers must meet: for a single purchaser $95,000 in modified adjusted gross income; For a married couple filing joint, $170,000 adjusted gross income.
The amount of the tax credit cannot exceed 10% of the purchase price of the residence. )Probably not an issue in our real estate market as $7500 is 10% of a $75000 purchase price.
This tax credit is, in fact, a loan from the U.S. government. It does have to be paid back, but there is no interest rate charged on the loan.
The payback will be $500 per year for 15 years. or the balance when the home is sold. The homeowner does not have to begin making payments for 2 years.
As you can see, the terms of the tax credit provision are a bit complex. There is a fairly detailed "Frequently Asked Questions on http://www.federalhousingtaxcredit.com/.
You can also call one of our loan reps at 909-748-7110 and he/she will be happy to assist you about the process.
This credit is to be available for purchasers who make a home purchase between April 9, 2008 and before July 1, 2009. The applicable date is the date the purchase closes and is recorded.
The Housing and Recovery Act of 2008 seems to be filled with incentives to restart the housing markets. One of the provisions is a tax credit for first time home buyers in an amount up to $7500. Since the passage of the act, there have many many questions concerning who is eligible?; what is the credit?;, how exactly will it be processed?
Here is a brief outline:
A "first time homebuyer" is defined as a buyer who has not owned a principal residence during the 3 year period prior to the purchase. First time homebuyers purchasing any kind of home - new or resale- may be eligible.
There are income limits that purchasers must meet: for a single purchaser $95,000 in modified adjusted gross income; For a married couple filing joint, $170,000 adjusted gross income.
The amount of the tax credit cannot exceed 10% of the purchase price of the residence. )Probably not an issue in our real estate market as $7500 is 10% of a $75000 purchase price.
This tax credit is, in fact, a loan from the U.S. government. It does have to be paid back, but there is no interest rate charged on the loan.
The payback will be $500 per year for 15 years. or the balance when the home is sold. The homeowner does not have to begin making payments for 2 years.
As you can see, the terms of the tax credit provision are a bit complex. There is a fairly detailed "Frequently Asked Questions on http://www.federalhousingtaxcredit.com/.
You can also call one of our loan reps at 909-748-7110 and he/she will be happy to assist you about the process.
This credit is to be available for purchasers who make a home purchase between April 9, 2008 and before July 1, 2009. The applicable date is the date the purchase closes and is recorded.
posted by shirley harry at 8:01 AM
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