First Time Home Buyer Credit for 2009
Who is a First Time Homebuyer?
A person or persons that have not had any ownership interest in a home in the three years previous to the day of the 2009 purchase.
What is the homebuyer tax incentive for 2009?
The 2008 $7,500, repayable credit is increased to $8,000 and the repayment feature is eliminated for 2009 purchasers. Any home that is purchased for $80,000 or more qualifies for the full $8,000 amount. If the house costs less than the $80,000, the credit will be 10% of the cost.
How does the tax credit work?
Every dollar of tax credit reduces income taxes by a dollar. Credits are claimed on an individual’s income tax return. Thus, a qualified purchaser would figure out all the income items and exemptions and make all the calculations required to figure out his/her total tax due. Then, once the total tax owned has been computed, tax credits are applied to reduce the total tax bill. So, if before taking any credits on a tax return a person has total tax liability of $9,500, and $8,000 credit would wipe out all but $1,500 of the tax due. If less than $8,000 total tax liability is due, the difference is credited to the tax payer just like a tax refund. This is called “refundable” credit.
If I the home is bought in 2009, do you have to wait until next year, 2010, to get the benefit of the credit?
Eligible homebuyers who make their purchases between January 1, 2009 and December 1, 2009 can treat the purchase as if it had occurred on December 31, 2008.
a. If they purchase between January 1, 2009 and April 15, 2009, they can claim the $8,000 credit on the 2008 return due April 15.
b. They can extend their 2008 income-tax filing until as late as October 15, 2009 (contact IRS for extension instructions)
c. If they have filed their 2008 return before they purchase the home they may file an amended 2008 tax return.
What are the income restrictions?
The income restriction is based on the tax filing status of the purchaser claims when filing his/her income tax return. Individuals filing form 1040 as Single or Head of Household, are eligible for the credit if their income is no more than $75,000. Married couples who file a joint return may have an income of no more than $150,000. Know that individuals with incomes higher than $75,000, the credit phases out between $75,000 - $95,000 for singles and $150,000 - $170,000 for married filing joint. As an example, if a married couple had income of $165,000, their credit would be reduced by 75%.
Are there restrictions on the location or type of property?
Home must be located in the United States and be a single family residence (condos, townhouse etc).
There are many other parts to this credit which I would be happy to further explain individually. This information was obtained at National Association of Realtors website and the entire “frequently asked questions” document can be viewed there.
CONSULT YOUR TAX ADVISOR FOR MORE INFORMATION
California First Time Home Buyer Tax Credit at a Glance
Eligible on NEW homes purchased between March 1, 2009 and March 1, 2010 (must be new construction to qualify)
No income restrictions, meaning that all home prices and incomes can participate.
Any home buyer buying a new home qualifies. You do not have to be a first time buyer as in the Federal credit above.
The total credit is $100 million which means approximately 10,000 home sales would qualify—don’t delay!
$10,000 credit is received in 3 annual installments of $3,333. Home buyers receive a credit $3,333 the first three years after purchasing the new home.
CONSULT YOUR TAX ADVISOR FOR MORE INFORMATION
HomePath
What is HomePath you ask?
When foreclosures occur on Fannie Mae Mortgages, the property that once collateralized the mortgage is called a Real Estate Owned (REO) Property. The investor’s primary goal is to sell the REO Property in a timely manner.
Coldwell Banker Mortgage, in conjunction with Fannie Mae, is now offering special financing for many of these REO Properties.
HomePath products provide benefits such as:
· No Appraisal
· No Private Mortgage Insurance (regardless of Loan To Value)
· Max LTV 97%
97% financing available on owner occupied with no mortgage insurance required. No appraisal necessary. Second homes and investment purchases allowed
This is a program to be used solely for properties currently held in Fannie Mae’s portfolio. To search for properties in your area that are eligible for HomePath financing go to homepath.com
Under the basic search tab put in the city and state and hit “search.”
If there are properties in that city, this will bring up the list. In some areas there may be no properties available and you will get a message to that effect.
- NUMBER1EXPERT™ 
