The U.S. Government is doing all it can to make the dream of homeownership a reality for many first time home buyers.  For those of you sitting on the fence, the 2009 tax credit is there for the taking, but time is running out.  Additionally, interest rates have been rising for the past month and are not likely to reach 4.5% again.  So, don’t wait any longer.  Here are a few first time home buyer tax credit questions and answers.

Background:  Congress passed legislation that grants a tax credit of up to $8,000 to first time home buyers.  This was done to stimulate the housing market and get the economy moving sooner rather than later.

Q:  Who qualifies?
A:  First time home buyers who purchase homes between January 1, 2009 and December 1, 2009.  A “first time home buyer” may not have owned a residence during the three years prior to the purchase.

Q:  What property is eligible?
A:  The tax credit may be applied to primary residences which include single family homes, condominiums, townhomes and co-ops.

Q:  What is the credit limit?
A:  The maximum credit is $8,000.  The 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, but no larger than $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 full credit amount.

Q:  If the Buyers’ income exceeds these limits, can he/she still receive the credit?
A:  Some buyers may still be eligible for the credit.  The credit decreases for single buyers who earn between $75,000 and $95,000 and for buyers filing jointly who earn between $150,000 and $170,000.  The amount of the tax credit decreases as income approaches the maximum limit.  Home buyers earning more than the maximum qualifying income ($95,000 for singles and $170,000 for couples) are not eligible for the credit.

Q:  Must the tax credit be repaid?
A:  As long as the buyer(s) occupy the home for three years or more, the tax credit need not be repaid.  However, if the property is sold during the three year period, the credit will be recouped by the government on the sale.

Buying your first home is a large commitment.  You deserve nothing less than top-notch service, so don’t settle for less.  Contact Michael Zimmerman for a no obligation consultation or give me a call at 808-457-9683.

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