First Time Homebuyer Tax Credit

One of the provisions of the new Housing and Economic Recovery Act of 2008, signed into law by President Bush on July 30, 2008 provides a First Time Home Buyer Tax Credit. The tax credit is available to qualified first time homebuyers. A first time homebuyer is anyone who has not owned any property in the past 3 years.

- As defined in H.R.3221 Section 36: " FIRST-TIME HOMEBUYER

- The term `first-time homebuyer' means any individual if such individual (and if married, such individual's spouse) had no present ownership interest in a principal residence during the 3-year period ending on the date of the purchase of the principal residence to which this section applies.""In the case of an individual who is a first-time homebuyer of a principal residence in the United States during a taxable year, there shall be allowed as a credit against the tax imposed by this subtitle for such taxable year an amount equal to 10 percent of the purchase price of the residence."
Note: the property may not quailfy for the credit if it is purchased from a relative.

The first time homebuyer tax credit is available to buyers of a primary residence purchased from April 09, 2008 through July 01, 2009. The allowable credit amount is 10% of the purchase price up to a maximum $7,500. Single tax payers with modified adjusted gross incomes up to $75,000. are eligible for the credit and married couples with combined modified adjusted gross incomes up to $150,000 are eligible. The credit is temporary and the amounts taken are recaptured (repaid) in future tax years, up to 15 years of ownership, or when the home is sold.

The new measure is part of the Housing and Economic Recovery Act of 2008. It should stimulate prospective homebuyers who may already recognize the bottom of the market but need another incentive to buy a home in the near future. The First Time Homebuyer Tax Credit is available through June 30, 2009 to qualified buyers. In all probability it will not be available beyond that date. It is a temporary economic stimulus.

Consumers are demonstrating interest in the measure according to the activity reported by the National Association of Home Builders Federal Housing Tax Credit website.

Other provisions of the H.R.3221 include FHA Modernization which increases FHA insured loan amount to 115% of an areas median home price up to a maximum of $625,500 which may in effect allow more working families to take advantage of FHA insured loans. The provision will also allow FHA to guarantee $300 billion to refinance mortgages where homeowners may be facing foreclosure.

Anyone needing more information on the tax credit or on the new loan limits and down payment requirements for FHA insured mortgages or on refinancing into a new loan can contact me directly at 561-306-6736 or email me or visit my website www.ges-realty.com