| The recession could be a good thing for first time | | | | than $145,000 and married couples with a MAGI that |
| homebuyers and some existing home owners who | | | | exceeds $245,000. |
| decide to take advantage of the newly updated | | | | Types of Homes that Qualifyo All homes with a |
| Federal Housing Tax Credit that is now being offered. | | | | purchase price of less than $800,000 qualify, including |
| A federal tax credit of up to $8,000 or ten percent of | | | | newly-constructed or resale, and single-family |
| the purchase price is being offered to first time home | | | | detached, townhomes or condominiums, provided that |
| buyers and a federal tax credit of up to $6,500 is | | | | the home will be used as their principal residence. |
| being offered to existing home owners. | | | | Rental property and vacation home purchases do |
| Here is a quick overview of the program: | | | | NOT qualify. |
| Who Qualifies For These Programso First-time home | | | | Is the Tax Credit Refundable?o Yes, refundable |
| buyers, who are defined by the law as buyers who | | | | means that if the amount of income taxes you owe is |
| have not owned a principal residence during the | | | | less than the credit amount you qualify for, the |
| three-year period prior to the purchase, may be eligible | | | | government will send you a check for the difference.o |
| for up to an $8,000 tax credit.o Existing home owner's | | | | All qualified home buyers can take the program on |
| who have been residing in their principal residence for | | | | either their 2009 or 2010 income tax return. |
| five consecutive years out of the last eight and are | | | | Are There Payback Provisions?o The tax credit is a |
| purchasing a home to be their principal residence | | | | true credit. It does not have to be repaid unless the |
| ("repeat buyer"), may be eligible for up to a $6,500 tax | | | | home owner sells or stops using the home as their |
| credit. | | | | principal residence within three years after the |
| Effective Dates for These Programso The eligibility | | | | purchase. |
| period for the program is for homes purchased after | | | | These new incentives being offered to spur the |
| Nov. 6, 2009, and before May 1, 2010. However, home | | | | economy will be very beneficial for those who are |
| purchases subject to a binding sales contract signed | | | | looking to buy or sell a home. The real estate industry |
| by April 30, 2010, will qualify for the program provided | | | | went through a similar scenario in the seventies with |
| closing occurs prior to July 1, 2010. | | | | large inventories of homes and price declines in real |
| Updated Income Limitso Home buyers who file as | | | | estate market. The $2,000 incentive that was offered |
| single or head-of-household taxpayers can claim the | | | | to home buyers then helped balance the real estate |
| full credit ($8,000 for first-time buyers and $6,500 for | | | | market and helped the United States pull out of a |
| repeat buyers) if their modified adjusted gross income | | | | recession in 1975. |
| (MAGI) is less than $125,000.o For married couples filing | | | | Now may be the chance that many people have been |
| a joint return, the combined income limit is $225,000.o | | | | waiting for to get into a new home. Home prices and |
| Single or head-of-household taxpayers who earn | | | | interest rates in most areas are at the lowest they |
| between $125,000 and $145,000, and married couples | | | | have been in years so now it is possible for many to |
| who earn between $225,000 and $245,000 are eligible | | | | buy more house with less money. These new |
| to receive a partial credit.o The program is not | | | | programs should help boost the real estate market in |
| available for single taxpayers whose MAGI is greater | | | | areas that have been hit hard by the recession. |