$8000 Federal Tax Credit For First Time Home Buyers – 100 Day Countdown

Back in the spring, Congress passed a federal tax credit for first time home buyers (or any one not having owned a home in the past three years) as part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation.

One of the key points of this credit was that the home had to be purchased (i.e. closed on) by November 30, 2009.  We have now hit the 100 day countdown to that date.
If you are someone who is eligible for the tax credit and still considering making a purchase, let’s look at what you need to do to get this credit by working backwards from the expiration date.

The credit expires at the end of Monday, November 30, 2009.  Since this is a Monday and the previous week is Thanksgiving, you effectively need to have all of your paperwork and loan work completed by the previous Monday, November 23.

It typically takes about 30 days to go through the closing process once you are under contract.  However, with the new appraisal guidelines and other factors, 45-60 days is becoming the norm.  We’ll use 30 days for now.  This means that you need to be under contract on your home by October 23, 2009.  During this 30 day period, you will conduct your inspections and perform any due diligence.  Your lender will work with you to complete your application and order an appraisal of the property.  If you have any challenges in your credit or financial background, the lender may need more time.

Assuming you can get everything done in 30 days, you now have 60 days to find your home, place an offer and negotiate to get it under contract.  That may sound like a lot of time but it depends on several factors:

1) How flexible are you with your home requirements?

2) What is the level of inventory available to you in the area you want and in the price range you want??

Assuming everything goes smoothly, now is the time to get serious about buying.  This tax credit is a great opportunity for home buyers and will most likely not be seen again.  When you factor in low prices, historically low interest rates and the credit, anyone who can qualify for this credit should seriously consider making a move now.

Please contact me for more information on the tax credit, current market conditions or to see a home you’re interest in.  And, don’t forget about the GA Tax Credit available to all buyers.

Here is some more information on the tax credit from housingmarketfacts.com

Breaking news: Tax Credit Can Be Used on Closing Costs.

Who Qualifies?

First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.   To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?

The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Will the Credit Be?

The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:

  • The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.
  • The buyer’s income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.