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Stimulus Credit for First Time Home Buyer
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| Congress Has Approved An $8,000 Tax Credit For Homebuyers.
Frequently Asked Questions
Q:
A: How much is the credit?
The tax credit would be $8,000 or 10% of the purchase price, whichever is less.
Q:
A: What type of purchase is eligible?
Similar to the $7,500 tax credit included in the Housing and Economic Recovery Act of 2008, the $8,000 tax credit included in the 2009 economic stimulus plan is available for the purchase of a principal residence by first-time homebuyers.
Q:
A: Who qualifies for the first-time homebuyer credit?
According to the IRS, any taxpayer who has not owned a home during the 3 years prior to the date of purchase can qualify for the credit.
Q:
A: And I really don't have to repay the credit?
No. This is a change from the previous $7,500 tax credit. However, if the home is sold within three years of purchase, the credit will be reversed.
Q:
A: Are there income limitations on the tax credit?
The tax credit begins to phase out for individuals with adjusted gross income over $75,000 ($150,000 for joint filers).
Here are six things you need to know about the freshly-enacted $8,000 first-time home buyer tax credit.
1. Eight grand, new buyers: This credit is equivalent to 10 percent of the purchase price of the home--although it's capped at $8,000--and applies only to first-time home buyers and principal residences. This one does not have to be repaid.
2. First time buyers defined: For the purpose of this legislation, a "first-time home buyer" is someone who hasn't owned a principal residence for three years before buying a house. (The date of purchase is considered the day that the title is transferred.) That means if you've owned a vacation home--but not a principal residence--within the past three years, you would still qualify for the credit.
3. 2009 buyers only: Only those who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit. Anyone who bought a home last year won't be able to take advantage of it.
4. Income limits: The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, that's $150,000 for married couples. Those earning more than these thresholds may be eligible for reduced credits.
5. Refundable: Because the tax credit is "refundable," qualified buyers can take advantage of it even if they don't have much tax liability.
6. Recapture: Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government. (Exceptions will be made in certain cases, such as death or divorce.
CITY OF ARLINGTON FIRST TIME HOMEBUYERS PROGRAM
HOME OWNERSHIP :: FIRST TIME HOMEBUYER ASSISTANCE PROGRAM :: FAQ
1. How do homebuyers apply for the first time homebuyer program?
Contact Tarrant County Housing Partnership, Inc. (TCHP) at 817-924-5091.
2. Will a poor credit rating affect the homebuyer’s application for homebuyer assistance?
The City of Arlington does not perform a credit check; however, to participate, you will need to be able to qualify for a mortgage. If you have credit problems, TCHP’s trained staff can help you improve your credit score in preparation for homeownership.
3. Is it necessary to participate in pre-purchase homeownership training?
Yes, to qualify for homebuyer assistance, applicants must complete a HUD-approved homeownership training course. Homebuyers may select from any of the HUD-approved housing counseling agencies to complete this training.
4. Will homebuyers be required to repay the homebuyer assistance?
If you continue to reside in the home you purchased for the required time period (typically five years), no repayment will be required. If you sell your home or move out before the end of the required time period, you may be required to repay a pro-rated portion of the funds provided at the time you sell your home or move out.
5. Will the homebuyer be charged interest for homebuyer assistance?
No, this loan is provided as a 0% loan. No payments are required as long as you continue to live in the home for the required time period.
6. Is a home inspection required?
Yes, the City of Arlington has contracted with Illumination Home Inspection for residential inspection services for this program. An inspection will be performed to ensure the home meets the applicable minimum property standards for this program. At your option, you can also obtain a Texas Real Estate Commission (TREC) inspection at the same time.
7. Is there a fee to apply for homebuyer assistance?
No, there is no application fee; however, you must personally contribute at least $1,000 towards the purchase price of your home.
8. If the homebuyer is now divorced but previously owned a home with a former spouse, do they qualify as a first time homebuyer?
If the homebuyer was not awarded possession of their previous residence through their divorce, they may qualify for the first time homebuyer assistance program as a displaced homemaker.
Please contact the program administrator, Tarrant County Housing Partnership, Inc. (TCHP) at 817-924-5091 with additional questions.
Please contact your loan officer or (the City of Arlington at 817-459-6777) with additional questions.
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Buy a Home With ABSOLUTELY NO MONEY DOWN
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Buying Services for Arlington Home Buyers
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Congratulations! You have decided to purchase a home, or are thinking about buying one. You'll be joining the ranks of hundreds of families who realize that home ownership offers a number of benefits including building equity, saving for the future, and creating an environment for your family. When you own your own home, your hard-earned dollars contribute to your mortgage. The equity you earn is yours. Over time, your home will increase in value.
In the following reports, you'll find the information you need to make a wise buying decision. We'll take you through the planning process step-by-step , to help you determine which home is right for you. You'll find a host of informative articles on mortgages, viewing homes, the offer, closing details and moving.
Please contact me if you have any questions about buying a home in Arlington or elsewhere in Texas. |
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