TAX CREDIT FOR HOMEBUYERS

WHAT IS IT?

There are now two parts of the tax credit. A $ 8000 credit for first time homebuyers who have an accepted offer on a home by April 30,2010 and close on the purchase by June 30,2010, and a $ 6,500 for any home owner who has owned a home for their personal residence for at least 5 years.

WHO IS ELIGIBLE?

First time homebuyers and anyone who has not owned a home in the 3 years prior to the day of purchase or any home owner who has owned a home as their personal residence for 5 consecutive years out of the previous 8.

HOW DOES IT WORK?

Every dollar of tax credit reduces income taxes by $ 1. In other words the tax credit is applied directly against the total tax owed.

 

 

 

IS THERE AN INCOME RESTRICTION?

Yes, for those filing form 1040 as single or head of household the income can not exceed $125,000. Married couples who file a joint return may have income of no more than $ 225,000. The price of the home can not be more than $ 800,000.

 

WHAT IS A PRINCIPAL RESIDENCE?

Generally it is the home where an individual resides at least 50% of the time.

 

ARE THERE PROPERTY LOCATION RESTRICTION?

Yes, the home must be located in the United States.

 

 

DO I HAVE TO REPAY THE TAX CREDIT?

No.

CAN I USE THE TAX CREDIT FOR A DOWNPAYMENT?

Not directly but FHA approved lenders may be able to make a seperate loan based upon the amount of tax credit you may be receiving. Check with your lender to see if this option would apply to you.

HOW DO I QUALIFY FOR THIS CREDIT?

Have an accepted offer for your home between now and 4/30/10 and close on the transaction by 6/30/10. To look for a  home sign up for our FREE Home Finder Service at claytonrealestateandauction.com.