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$8000 First-Time Home Buyer Tax Credit
The home buyer tax credit is one of 10 key provisions of the American Recovery and Reinvestment Act signed by President Obama into law on Feb. 17, 2009.
The bill provides for an $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.
Tax Credit Bridge-Loan Information
- HUD Secretary Shaun Donovan recently announced a program that would allow borrowers to use the first-time homebuyer tax credit for a down payment or closing costs on an FHA insured mortgage to scores of REALTORS® at the 2009 NAR Mid-Year Conference.
- Under the guidelines of the program, FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent. However, according to senior HUD officials, loans cannot be used to cover the minimum 3.5 percent requirement. Thus, buyers applying for FHA-backed financing with an FHA-approved lender that offers a bridge-loan program can get a bridge-loan to significantly bring down the upfront costs of buying a home, but would still have to come up with the minimum 3.5 percent down-payment.
- Secretary Donovan said “We think the policy is a real win for everyone, ensuring that borrowers can tap into the numerous organizations that are already part of the FHA network to receive this additional benefit.”
- Read the detailed guidelines in HUD Mortgagee Letter 2009-15.
Although this program has been formally announced, details on how Indiana will implement the program are not yet available. The Indiana Association of REALTORS® is currently working with the Indiana Housing and Community Development Authority (IHCDA) on details for the state. Watch future editions of Fast Track for additional information as is becomes available. If you have further questions, contact MIBOR’s Government Affairs department at 317/956-1912.
The links below are provided by the National Association of REALTORS® (NAR):
For more information please visit NAR’s Home Buyer Tax Credit Web page by clicking here.
