New Tax Credit for First Time Home Buyers Now Extended Until April 30, 2010
The original deadline was December 1st, 2009. The Income limits for those eligible under the new provisions have also been raised (from$75,000) to $125,000 for single tax payers and $225,000 for married tax payers filing jointly (from $150,000) for sales occurring AFTER November 6th, 2009.  The old limits still apply for sales between January 1st, 2009 and November 6th, 2009.

Claiming your Tax Credit

Claiming your tax credit is as simple as applying it on your 2009 or 2010 tax return. And, if you buy a home after you file your 2009 tax return, you can even amend your return and still receive your refund for "2009". This tax credit is refundable, which means you'll get back the full amount even if your total federal tax liability is less.

NEW Income Tax Limits
The new home buyer tax credit is subject to some income limits. The amount is reduced for a single home buyer who earns more then $125,000 and $145,000 and married couples (filing jointly) who earn more the $225,000 and $245,000. Singles earning more than $145,000 and couples filing jointly earning more than $245,000 are no longer eligible for the first time home buyer credit. For more information visit  IRS Form 5405.

What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principle residence during the three-year period prior to the purchase. For married taxpayers, the law tests the home-ownership history of both the home buyer and his/her spouse.

How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000.

Eligible Property
Any home that will be used as a principle residence will qualify for the tax credit, provided the home is purchased for a price less than or equal to $800,000. This included single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also know as mobile homes) and houseboats.

If you're considering on buying a home this year time is of the essence. To take advantage of this opportunity buyers must have purchased a home on or after January 1, 2009 and before April 30, 2010.  However, if the binding sales contract is signed by April 30, 2010, the settlement date must be completed by June 30, 2010 to qualify.

HUD is now allowing "monetization" of the tax credit. What does that mean?

This means that HUD allows buyers using FHA-insured mortgages to apply their anticipated tax credit toward their home purchase immediately rather than waiting until they file their 2009 or 2010 income tax return. These funds may be used for certain down-payment and closing cost expenses.

Under HUD's guidelines, non-profit and FHA-approved lenders are allowed to give home buyers short-term loans of up to $8,000. The guidelines also allow government agencies, such as state housing finance agencies, to facilitate home sales by providing longer term loans secured by second mortgages.

Housing finance agencies and other government entities may also issue tax credit loans, which home buyers may use to satisfy the FHA 3.5 percent down-payment requirement. In addition, approved FHA lenders can purchase a home buyer's anticipated tax credit to pay closing costs and down-payments costs above the 3.5% percent down-payment that is required for FHA-insured homes.

We know purchasing a home can be a bit complex and one of the biggest steps in your lifetime, that's why we are determined and prepared to walk you through every step of the way. At MyEzLoanQuote.com, we are dedicated to helping our clients finding the best affordable loan for their individual needs.

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