On Monday 5/18/09 Federal officials reversed an earlier decision to allow first-time home buyers to use an $8,000 tax credit to borrow the down payment on a home.
In an earlier decision last week, HUD had told the National Association of Home Builders that it would let banks and local governments offer short-term "bridge loans" to cover the down payment for first-time buyers who qualify for the tax credit. Many industry leaders reacted favorably to this proposal saying that it would open up the market to many more 1st time home buyers.
Under the current program first time home buyers of principal residences may qualify for up to a $8,000 tax credit for purchases between January 1, 2009 and December 1, 2009. To define a first time home buyer under the current plan you can not have owned a principal residence within the past three years. You could have owned a vacation property and still qualify for the tax credit. This credit is refundable and there fore can be used by those who do not have a lot of tax liability. Participants in the program also have to keep the home for a minimum of three years or they may be required to return the tax credit.
There are income limits on this program. Single buyers need an adjusted gross income of $75,000 or less, and married couples an adjusted gross income of $150,000 gross income or less. Those who earn more than this still may qualify for a reduced tax credit, as always for questions please consult your tax advisor for your income eligibility.
