The first time home buyer credit has been extended and expanded to include repeat buyers! Some of the changes/highlights to the new law that was just signed on November 6, 2009 by President Obama are:

First Time Homebuyer Credit/Repeat Homebuyer Credit Highlights

  1. Income eligibility has been increased to $125,000 single filer, $225,000 married filer, for the full benefit, with a phase out of the credit once the single filer AGI (Adjusted Gross Income) is $145K, and $245 for married filer.
  2. The amount of the tax credit is 10% of the purchase price up to $8,000 for First Time Homebuyers, and 10% of the purchase price up to $6,500 for repeat home buyers
  3. You must be in a “binding contract” by April 30, 2010, with closing taking place by June 30, 2010. Note that if you are in the military, stationed overseas then these dates can be extended up to 1 year!
  4. You can not buy the house from a relative, sibling or someone you are related to by blood or marriage
  5. You need to attach a copy of your HUD-1 Settlement Statement to your tax return in order to claim the refund
  6. As with the previous tax credit you are able to either claim the credit in the year you buy the house, or you can re-file your previous years tax return in order to gain the refund right away.
  7. This is a refundable tax credit not a deduction!  What does this mean? It means that lets say you had previously field your taxes, were all “even” with the government (IRS), meaning you had received your refund or paid your tax bill for last year.  You can refile your taxes and get the money back, dollar for dollar! Of course if you have back child support or other government liens i.e. defaulted student loans etc. then they will keep you refund and apply it to that liability.
  8. With either program the new house must be your primary residence for the next three years or you will have to repay the credit.

The repeat home buyer credit has some of the following highlights:

  1. You must have occupied your primary residence for 5 consecutive of the last 8 years.  This means that even if you sold your house last year, you can still be eligible under this program
  2. You do NOT have to sell yor current primary residence, you can just buy a new one (so long as you move into and maintain the new house as your primary residence) 
  3. You do not have to buy a “bigger or more expensive home”.  You can downsize and many homes are eligible including Co-Ops, Town homes, Condos, and even mobile homes.

For either program, their are many rules and regulations and requirements.  As always you must check with your tax advisor for the rules and regulations and to assure that you are eligible. 

If you would like more information, or have any questions please do not hesitate to contact us at info@razormortgage.com or 607-797-1200.