$8,000 Home Buyer Credit FAQ | Realtor Coaching
When do I need to purchase to qualify?
If you buy a home between Jan. 1 and Dec. 1, 2009, and close escrow during these dates, you will qualify for an $8,000 tax credit – as long as it is your primary residence and you meet requirements listed below.
How does the law define “first-time homebuyer”?
The law defines “first-time homebuyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. This does not necessarily mean they have NEVER owned a home, just not in the 3 year period prior to this purchase.
What are other requirements to qualify?
All U.S. citizens who file taxes are eligible to participate. An income limit of $75,000 per year for individuals and $150,000 a year for joint filers also applies.
How do I apply for the credit?
Taxpayers should use IRS Tax Form 5450 to claim the first-time homebuyer tax credit. Tax forms are available online.
Does the credit have to be repaid?
No. Unlike a similar tax credit passed in 2008, this $8,000 tax credit does not have to be repaid to the IRS.
Can the tax credit be used toward a down payment or other closing costs?
Yes. An announcement made May 29 allows the tax credit to be used toward purchase costs of a home, including down payment in some cases. This can be done one of two ways. First, buyers using an FHA-approved lender can sell their anticipated tax credit to the lender and use the proceeds to immediately apply the tax credit to any down payment above the minimum down payment of 3.5 percent required with FHA-insured mortgages. Second, buyers who receive financing through state housing finance agencies and certain non-profits will be able to use the tax credit for their down payments via a tax credit advance loan that does not result in any cash back to the buyer. FHA-approved lenders should have these guidelines.
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Hi,
I love your blogs and current news! I am a member and am curious to know whether or not you know that the $8K credit to be used for downpayment and closing cost assistance is not being accepted by the lenders is what i am hearing from my mortgage broker. They don’t know where the money is coming from. The government has not ironed all the details so is this one of the ignored solutions that never make it, like HOPE was?
You do a great job of finding things out. Can you investigate this or if you know of any inside information on how the government will supplement this $8k back to the lender, I would love to know! I have two buyers under agreement that I could get excited about this if the credit can actually or is actually being used now by a buyer to put down. I know that the buyer must satisfy the 3.5% down payment before they could use the credit.
Thank you and keep up the great motivational messages and news you bring to us!
Hi,
Thanks for the feedback and compliments!
We too are researching this….I am working on discovering the answer for you now.
Tim
In researching the actual IRS tax Form to see how it reads, I have found the Form 5450 is wrong and the correct Form is 5405 according to the IRS Printouts. I can’t find a Form 5450. Guess some numbers got misplaced some where down the line. You can go to the IRS website and pull it up. FYI Sharing the info!.
Shelia