Here is some good information on the new home buyer tax credit.
First Time Home Buyer Tax Credit
· A First Time Home Buyer is defined as someone who has not owned a Primary Residence in the past 3 years
· Once you marry a homeowner you automatically become a homeowner regardless of who is on the title and the loan (IRS rules, not my rules)
· The buyer must have an accepted purchase contract by April 30, 2010 and fund/record by June 30, 2010 to qualify.
· In Arizona, there is no way to use this money upfront for down payment or closing costs unfortunately
· The Tax Credit is the lesser of 10% of the purchase price or $8000
· The Tax Credit is “real money” that you get as part of your tax refund
· This credit does not need to be repaid if you live in the home for 3 years
· The credit begins to “phase out” for Singles with income above $125k/year and Married above $250k/year
· The max purchase price of the home is $800k.
· If Mom and Dad (that own a home) Co-Sign for their child to help him qualify, the child can still take the Tax Credit. Perfect for an FHA loan!
· This Tax Credit is a Tax Related issue and therefore you should consult a tax professional for advice. Two good websites for info are www.federalhousingtaxcredit.com and http://www.irs.gov/newsroom/article/0,,id=206294,00.html (IRS site still needs to be updated for the move-up buyer tax credit).
· To claim the credit the buyer must include IRS tax form 5405 along with a Final Stamped HUD-1 Settlement Statement issued by the title company after a successful close.
”Move-Up Buyer” Tax Credit
· A “Move-up Buyer” is defined as a home owner who has owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date.
· The buyer must have an accepted purchase contract by April 30, 2010 and fund/record by June 30, 2010 to qualify.
· In Arizona, there is no way to use this money upfront for down payment or closing costs unfortunately
· The Tax Credit is the lesser of 10% of the purchase price or $6500
· The Tax Credit is “real money” that you get as part of your tax refund
· This credit does not need to be repaid if you live in the home for 3 years
· The credit begins to “phase out” for Singles with income above $125k/year and Married above $250k/year
· The max purchase price of the home is $800k.
· This Tax Credit is a Tax Related issue and therefore you should consult a tax professional for advice. Two good websites for info are www.federalhousingtaxcredit.com and http://www.irs.gov/newsroom/article/0,,id=206294,00.html (IRS site still needs to be updated for the move-up buyer tax credit).
· To claim the credit the buyer must include IRS tax form 5405 along with a Final Stamped HUD-1 Settlement Statement issued by the title company after a successful close.
· Loan underwriting guidelines still state that a move-up buyer needs to qualify with both mortgage payments unless the primary residence that the borrower is vacating has 25%/30% (FHA/Conventional) equity along with a rental contract and proof of security deposit.
Take Care,
