I have been getting a lot of phone calls on the $8,000 first time homebuyer tax credit. Here is how it works,
New Stimulus Plan Passed
Officially titled the American Reinvestment and Recovery Act of 2009, it is the largest spending free-for-all in history. But does it do anything for housing?There are really only two provisions that address housing. First it allows the temporary increases in conventional loan limits for high cost areas to remain. Secondly, it expands the First Time Homebuyer Tax Credit. The First Time Homebuyer Tax Credit was already in effect last year but was set to expire July 1, 2009. It has now been extended to December 31, 2009. Here is how it works: - Up to an $8,000 tax credit for a first time home buyer that purchases a primary residence. - A “first time home buyer” is someone that has not purchased a home in the past three years but they are allowed to have owned a home prior to that. - There is an income cap of $95,000 for a single filer and $170,000 for those filing jointly (modified adjusted gross income). - You can decide to apply the tax credit to your 2008 return or your 2009 return. - This is not free. You have to pay the money back by getting a smaller refund each year until it is repaid. - There is the ability to Request a Waiver of Requirement to Repay the tax credit if you meet certain conditions and you occupy (not just own) for at least 36 months. - Uncle Sam is not going to be mailing anyone an $8,000 check that buys a home. - State housing loans are now eligible for this program.
It used to be that if you used MFA you could not get the tax credit. The stimulas package now allows people who use MFA to get the tax credit. I am verifying that the local office agrees.