Many First Time Home Buyers have begun to spring into action to take advantage of the $8,000 tax credit or 10% of the purchase price whichever is lesser. Home Buyers who qualify can not have owned a residence in the past 3yrs, this means that a buyer could not have been listed on a deed in the last 3yrs.  

The tax credit has also been granted to current home owners.  This tax credit is in the amount of $6500, or 10% of the purchase price whichever is lesser.  Buyers in this case have had to own a residence consecutively for 5yrs in the last 8yrs.  A home owner does not have to buy up to qualify, meaning they do not have to purchase a home more than their current  home is worth. 

Buyer's do have to be under contract to purchase a new home by April 30th, 2010 and the deal will have to be closed by June 30th.  This tax credit is extended to June 30th, 2011 for anyone who has served in the Military for at least 90 days. 

This a great time to buy, and with the tax season ending what better way to use your refund check than investing in a dream!

For More Information on Tax Benefits Visit www.IRS.gov

After a sticky situation, debating on whether a proposed $8K tax credit could be used toward the down payment of a home purchase without conflicting the requirements for first time home buyer’s already set forth by federal standard, HUD has manifested a plan.

A first time home buyer can use their tax credit toward their down payment, if a buyer is using FHA insured financing. The credit will be considered a tax advance, in which a nominal fee will be charged to the home buyer at settlement. This charge is not to exceed 2.5% of the advanced amount. For example if an advance is $6,000 the fee should only be $150.

The advance tax can not exceed closing costs; therefore a buyer can not walk away from settlement with cash in hand. Buyers also can not establish a second mortgage that would exceed the amount of their down payment, closing costs, and prepaid expenses. Basically what FHA wants first time home buyers to know is that they are not purchasing a home “Scott Free,” 3.5% of the purchase amount of their home is still required.

For additional information please visit www.irs.gov and www.hud.gov.