| Who is Eligible | | | | 9, 2008 and before July 1, 2009. To qualify, you must |
| *The $7,500 tax credit is available for first-time home | | | | actually close on the sale of the home during this |
| buyers only. | | | | period. |
| *The law defines a first-time home buyer as a buyer | | | | Tax Credit is Refundable |
| who has not owned a home during the past three | | | | *A refundable credit means that if you pay less than |
| years. | | | | $7,500 in federal income taxes, then the government |
| *All U.S. citizens who file taxes are eligible to participate | | | | will write you a check for the difference. (a) For |
| in the program. | | | | example, if you owe $5,000 in federal income taxes, |
| Who is not Eligible | | | | you would pay nothing to the IRS and receive a |
| *First Time Buyers using a state or local housing | | | | $2,500 payment from the government. (b) If you are |
| agency tax-exempt bond mortgage to finance the | | | | due to receive a $1,000 tax refund from the |
| property. | | | | government, your refund would grow to $8,500 ($1,000 |
| *Non-resident aliens | | | | plus $7,500 from the home buyer tax credit). |
| Types of Homes that Qualify for the Tax Credit | | | | *If you purchased the home in 2008, the tax credit is |
| *All homes, whether single-family, townhomes or | | | | taken on your 2008 tax return. |
| condominiums will qualify. | | | | *If you buy in 2009, you have the option of taking the |
| * However, there are several conditions: (a) The home | | | | credit on your 2008 or 2009 tax returns. |
| must be used as a principal residence, and | | | | Payback Provisions |
| (b) The buyer has not owned a home in the prior three | | | | *The tax credit is an interest-free loan that must be |
| years. | | | | repaid over 15 years. |
| *The Tax Credit includes newly-constructed homes. | | | | *The minimum repayment amount must be 15 equal |
| Income Limits | | | | annual installments. For example, if the credit amount is |
| *Home buyers who file as single or head-of-household | | | | $7,500, then the home buyer must repay a minimum of |
| taxpayers can claim the full $7,500 credit if their | | | | $500 each year for 15 years. |
| adjusted gross income (AGI) is less than $75,000. | | | | ALSO: On July 30, 2008, President Bush signed into |
| *For married couples filing a joint return, the income limit | | | | law a new housing reform bill designed to help |
| doubles to $150,000. | | | | stimulate the recovery of the housing industry.NOW is |
| *Single or head-of-household taxpayers who earn | | | | the time to take advantage of existing home buying |
| between $75,000 and $95,000 are eligible to receive a | | | | assistance programs before they expire later this year. |
| partial first-time home buyer tax credit. | | | | Two important changes are: |
| *Married couples filing jointly who earn between | | | | 1. All government-sponsored zero down payment |
| $150,000 and $170,000 are eligible to receive a partial | | | | assistance programs are eliminated as of October 1, |
| first-time home buyer tax credit. | | | | 2008.To be eligible for these programs, all home loans |
| *The credit is not available for single taxpayers whose | | | | would need to be approved by September 30, 2008. |
| AGI is greater than $95,000 and married couples filing | | | | 2. The minimum down payment for Federal Housing |
| jointly with an AGI that exceeds $170,000. | | | | Administration (FHA) loans, the largest purchaser of |
| Effective Dates for the Tax Credit | | | | mortgages in the United States, would increase from 3 |
| First-time home buyers would receive a $7,500 tax | | | | percent to 3.5 percent after October 1, 2008. |
| credit for the purchase of any home on or after April | | | | |