First-Time Home Buyer Tax Credit

Congress increased the first-time home buyer tax credit to $8,000 from $7,500 in February 2009, and eliminated the repayment requirement. This tax credit is available to first-time home buyers who purchase homes between January 1, 2009 and December 1, 2009 . . . the sales contract must be closed by December 1.

Qualifications for these tax credits are shown below:

First-time home buyers . . . purchaser or his/her spouse . . . may not have owned a residence during the three years prior to the purchase.

Tax Credit applies to primary residences: single-family homes, condos, townhomes, and co-ops.

Maximum allowable credit is equal to 10% of the purchase price . . . up to $8,000.

Maximum tax credit is available to single buyers with income up to $75,000 and to married couples up to $150,000.

Tax credit decreases for single buyers with income between $75,000 and $95,000 and to married couples with income between $150,000 and $170,000.

Singles earning over $95,000 and couples earning over $170,000 are not eligible for the tax credit.

Home must be occupied for three years or more to qualify for non-repayment.

If property is sold during the three-year period, the credit will be recouped on the sale.

Starting July 1, 2009, First-time home buyers in Florida can apply for downpayment assistance in advance of closing and then repay the amount borrowed when they get their tax refund. The program will be administered by local county housing authority.

FHA-approved lenders will soon be able to issue a short-term bridge loan equal to the tax credit to be applied to additional downpayment or other closing costs above the 3.5% downpayment required to be paid by the buyer.

To discuss this tax credit, contact our office at 866-768-2895 or call your local county housing authority or an FHA-approved lender in your area. Also you may visit the website www.floridarealtors.org/aboutfar/homebuyercenter/index.cfm.

Please be advised that this is a new program and internal programs with lenders and county housing administrators will require some time to work out the details and are subject to change. The above details for the tax credit were provided by the National Association of Realtors and the Florida Association of Realtors.