Time is running out on the First Time Homebuyer Credit Program, set to expire at the end of November. To qualify for the $8000 credit, prospective homeowners must close on their loan before December 1st, 2009. With interest rates under 5%, now is a great time for those who qualify for the credit to purchase their first home.
Want to know if you qualify?
Here are some facts you should know about the First Time Homebuyer Credit:
- The credit is for up to 10% of the home’s purchase price (with a max. of $8000).
- The credit does not need to be paid back as long as the house remains your primary residence for 36 months.
- Taxpayers (including spouse, if married) who owned a principal residence at any time during the three years prior to the date of purchase are not eligible for the credit.
- Taxpayers are not eligible if the home is purchased from a close relative.
- Taxpayers are not eligible if their modified adjusted gross income is too large ($95K for single, $170K for joint).
- The credit is reduced based on your modified adjusted gross income (MAGI). For a married couple filing a joint return, the phase-out range is $150,000 to $170,000. For other taxpayers, the phase-out range is $75,000 to $95,000. This means that the full credit is available for married couples filing a joint return whose MAGI is $150,000 or less and for other taxpayers whose MAGI is $75,000 or less.
- If two unmarried people purchase a house and one of the purchasers is not a first time home buyer, the other purchaser is still eligible for the full $8000 credit.
- The credit is claimed using Form 5405
It’s still uncertain whether the First Time Homebuyer Credit will be extended beyond the current expiration at the end of November. With mortgage loans typically taking 30-45 days to close, those looking to cash in on the deal need to act fast!
For more information, see:
IRS.gov: First Time Homebuyer Credit
FederalHousingTaxCredit.com
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