News, updates, and explanations to keep you informed.
$8,000 Tax Credit for First-Time FHA Loan Homebuyers
2009 brought much homeowner relief in the form of programs like Home Affordable, also known as the Obama mortgage. But President Obama has also signed into law a tax break for first time home buyers good only in 2009. If you are contemplating an FHA loan on your first home, you may qualify for an $8,000 tax credit.
Tax credits are nothing new for home buyers, but the 2009 first time home buyer’s tax credit features some important differences. Unlike the 2008 tax credit, the 2009 version does not have to be paid back to the government as long as you remain in your new home for at least three years. Unfortunately, the 2009 tax credit is not permanent—it is only good until December 1, 2009. This is a temporary break designed to act as a homeowner bailout program and one which could stimulate the housing market. President Obama has signed off on the bill approving of the extension of the $8,000 New Home Buyer Tax Credit until April 30, 2010)
If you are a first-time home buyers, you aren’t instantly eligible for the 2009 tax break--there are requirements you must meet. Those requirements include “first time home buyer” status, but it doesn't limit the tax break to those who have never purchased a home before. If you haven't owned a primary residence in the last three years, you also may qualify. The 2009 tax break is only for those who buy a home between January 1st, 2009 and December 1st, 2009.
The 2009 Federal Tax credit requires borrowers to make no more than $75,000 per year for single borrowers and $150,000 for married couples filing a joint tax return. Married couples filing separately can qualify for higher income limits, but married couples who want the 2009 tax credit must BOTH be purchasing for the first time or who meet the "three year" requirement. If either spouse has purchased a primary residence in the last three years, the couple cannot qualify for the $8,000 tax break.
If you have purchased other property (such as a summer home) you are not automatically disqualified. The purchase of any other building NOT considered a primary residence—the place where you live most of the year—doesn't count and you may still qualify for the $8,000 tax credit.