Tax Credit for First Time Home Buyers
This is the most exciting time for first time home buyers, or buyers who have not owned a house for the past 3 years. The Tax Credit, as part of the stimulus package of 2009, is a true tax credit, not a 0% loan, as last years plan was. In this years's plan, the $8000, for qualified buyers, is a true tax credit - it is money you actually get back from the government!! Some of the requirements are income: $75000 for each spouse (or for a single person) and the tax credit is a maximum of $8000, not to exceed 10% of the value of the house.
The really exciting part of buyers in out lying parishs who qualify for Rural Development Financing, if you can get the seller to assist with the closing costs, and you get a 100% RD loan, you can end up with money left over when you get the tax credit!!!
Here is an example of how the tax credit could work in East Baton Rouge Parish with no RD money:
$200,000 Sales Price
$7000 Down Payment (3.5% of loan amount for an FHA Loan)
Seller pays all closing costs.
You have $1000 left over from the $8000 to pay for your inspection and appraisal!!
There are currently two main ways to collect the $8000. The first and fastest way, at this time, are to file an amended 2008 tax return after closing. The second way is to change your withholding so that you get a piece of it each month. HUD has been trying to find a way to let the buyers use this money at closing but at this time, they haven't gotten that figured out.
A lot of this is confusing, so just give us a call and we'll help you figure out if you qualify for the package and what the fastest way of getting the tax credit will be for you.
