$8,000 Worth of Great News for First-Time FHA Loan Homebuyers
There's nothing new about tax credits for home buyers, but the 2009 first time home buyer's tax credit passed as part of the Obama stimulus package does have some important differences. Unlike the 2008 tax credit, the 2009 version does not have to be paid back to the government. This tax credit is not permanent-it is only good until December 1, 2009. (President Obama has signed off on the bill approving of the extension of the $8,000 New Home Buyer Tax Credit until April 30, 2010)
First-time home buyers aren't instantly eligible for the tax break. There are a set of requirements you must meet in order to get the $8,000 tax credit on your first time homebuyer mortgage. Those requirements include "first time home buyer" status, naturally-but what does that mean?
In this case, first time home buyers are those who are purchasing a "primary residence" for the first time. Are you trying to get an FHA loan and interested in this tax credit? FHA loans require you to live in the property you buy, so if you are approved for an FHA loan you meet the "primary residence" requirement for the tax credit.
But this tax break is not just for those who have never purchased a home before. If you have not owned a home in the three years prior to the purchase of your new primary residence, you also qualify if you buy your home between January 1st, 2009 and December 1st, 2009.
The 2009 Federal Tax credit requires borrowers to make no more than $75,000 per year for single borrowers and $150,000 for married couples filing a joint tax return. Married couples filing separately get more leeway with their incomes-you have a higher income limit in these cases. There's just one catch; married couples who want the 2009 tax credit must BOTH be purchasing their first home. If either spouse has purchased a primary residence in the last three years, the couple cannot qualify for the $8,000 tax break.
It's important to know that simply having purchased property does not automatically disqualify you from this tax credit. If you have purchased a summer home or any other building that is not considered a primary residence-the place where you live most of the year-you may still qualify for the $8,000 tax credit.
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