Ten Facts about the $8,000 First-Time Homebuyer Tax Credit

Ten Facts about the First-Time Homebuyer Credit

Many taxpayers who purchase a home in Maryland this year will qualify for an $8,000 federal tax credit. The refundable first-time homebuyer credit is a major tax provision in the American Recovery and Reinvestment Act of 2009. But time is running out to qualify for this credit.

Here are ten things the IRS wants you to know about the first-time homebuyer credit:

1. To be considered a first-time homebuyer, you – and your spouse if you are married – must not have jointly or separately owned another principal residence during the three years prior to the date of purchase.

2. You cannot claim the credit before there is a completed sale and purchase of the residence. The sale and purchase are generally completed at the time of closing on the purchase.

3. To qualify for the credit, the completed purchase must occur before December 1, 2009.

4. The home must be located in the United States.

5. The credit is either 10 percent of the purchase price of the home or $8,000, whichever is less.

6. The amount of the credit begins to phase out for taxpayers whose modified adjusted gross income is more than $75,000 or $150,000 for joint filers.

7. The credit is fully refundable. A homebuyer with no taxable income, who qualifies for the credit, may file for the sole purpose of claiming the credit and receive a refund. The credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.

8. The credit is claimed on IRS Form 5405, First-Time Homebuyers Credit.

9. Taxpayers can claim the credit for a qualified 2009 purchase on either their 2008 or 2009 tax return. For those who have filed a 2008 return, a Form 1040X, Amended U.S. Individual Income Tax Return can be filed in order to get a refund in 2009.

10. The credit for qualified 2009 purchases does not have to be repaid, as long as the home remains your main home for 36 months after the purchase date.

Qualified taxpayers who have been considering a main home purchase may find extra incentive from this tax credit to buy now so they can complete the purchase before the December 1 deadline.

 

 

For more information on this and other key tax provisions of the Recovery Act visit the official IRS Website at IRS.gov/Recovery.

Links:
First-Time Homebuyer Credit
YouTube Video - First-Time Homebuyer: English Spanish ASL
Audio File for Podcast - First-Time Homebuyer Credit 2009: English Spanish
The American Recovery and Reinvestment Act of 2009: Information Center
Form 5405, First-Time Homebuyer Credit (PDF)
Form 1040X, Amended U.S. Individual Income Tax Return (PDF)

NEW Financing Programs for Home Buyers in Maryland

American Dream Downpayment Initiative (ADDI) FUNDS AREA NOW AVAILABLE EVEN IN THIS SLOW MARKET! GET STARTED NOW!
The American Dream Downpayment Initiative is a first time home buyer assistance program that encourages home ownership for lower income and minority households in Maryland. If you are a first time home buyer in Baltimore, Harford County or anywhere in Maryland and you are struggling to come up with a downpayment, enough money for closing costs or money to make improvements to your house, the ADDI program maybe a solution.

What are the benefits?
$10,000 downpayment and closing assistance structured as a 5-year loan , forgivable 20 percent per year.

What are the restrictions?
Buyer must contribute at least $1,000 towards purchase of your home in Maryland and must use the property as their primary residence. The buyer must secure an HQS (Housing Quality Standard) Home Inspection on the property. The home must be free of any flaking, peeling, or chipping paint surfaces. Closing on the property must occur within 90 days of the contract date. Loan is forgivable over 5 years.

America Dream Downpayment Initiative 2008 Income Limits:
1 persons $43,0502
2 persons $49,2003
3 persons $55,3504
4 persons $61,5005
5 persons $66,4006
6 persons $71,3507
7 persons $76,2508
8 persons $81,200

CDA Loan Program (Community Development Administration)The CDA loan program has a large variety of loan products that offer first time home buyers below market mortgage interest rates and flexible home loans. The CDA current has six low-interest rate mortgage programs:
Interest Rate Points APR
6.375% 3-point Mortgage 6.771%
6.500% 2-point Mortgage 6.797%
6.625% 1-point Mortgage 6.824%
6.750% 0-point Mortgage 6.851%
7.250% 2% Closing Grant (0 points) 7.155%
7.500% 3% Closing Grant (0 point) 7.305%

The rates are frequently reviewed and subject to change. CLICK HERE and start your loan application now or simply call Robert B. McArtor today! 410-879-0622
equal housing opportunity.

BUY YOUR FIRST HOME IN MARYLAND and SAVE $7,500 on YOUR INCOME TAXES

The Government is Helping Americans Buy Their First Home.

What an incredible opportunity for first-time homebuyers in Maryland, Harford, Baltimore Cecil County and surrounding areas!

In addition to a huge selection of homes in Maryland to choose from, and near-record low interest rates on solid, 30 year fixed rate mortgages, and far more affordable prices, first-time homebuyers in Baltimore now have the added incentive of a $7,500 federal income tax credit to help them buy their first home!*

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One simple phone call to Robert B. McArtor with Maryland HOMES Team and we will get you on the road to homeownership. Meet with our friendly, knowledgeable Long and Foster real estate staff member. While you're at it, meet with a Prosperity Mortgage loan officer and get pre-qualified for a mortgage.

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*Legislation has just been passed by Congress and signed by the President, granting first-time homebuyers a tax credit of up to $7,500 on their federal income tax return if they purchase a home between April 9, 2008 and July 1, 2009

FIRST TIME HOMEBUYER, SEARCHING FOR HOMES IN MARYLAND, HARFORD, BALTIMORE COUNTY AND CITY

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HOME MARKET WATCH NEWSLETTER. Each month, we publish a series of articles of interest to homeowners looking to Auction, Buy or Sell their Home Traditionally in the Maryland, Baltimore, Harford, Cecil County areas. -- money-saving tips, household safety checklists, home improvement advice, real estate insider secrets, etc. Whether you currently are in the market for a new home, or not, we hope that this information is of value to you. Please feel free to pass these articles on to your family and friends.