For those of you that are Buyers who are banking on being eligible for the federal housing tax credits here is some information you may find helpful!!
The $8,000 tax credit is for first-time homebuyers only. For the tax credit program, the IRS defines a first-time homebuyer as someone who has not owned a principal residence in the last three years.
This first-time home buyer tax credit is not a loan, it does not have to be re-paid. This credit applies to homes priced below $800,000. This tax credit applies sales that occur before April 30, 2010, however, if you have a binding purchase contract by April 30, 2010, and have a successful close of escrow BY June 30, 2010, you will still be eligible for the first-time home buyer credit. The escrow must be recorded and closed by that date. There are income limits on this tax credit, single tax payers cannot make over $125,000 and married couples cannot make over $225,000 in order to qualify for the full tax credit. Additionally, this tax credit is equal to 10% of the homes purchase price but no more than $8,000.
The $6,500. Move Up/Repeat Home Buyer Tax Credit is someone who has owned and lived in their previous home for five consecutive years out of the last eight years. Again, this tax credit is not a loan anddoes not have to be re-paid. This tax credit is equal to 10% of the homes purchase up to $6,500. The tax credit applies only to homes $800,000 or less. This tax credit also has the same time limit requirements as the first-time home buyers credit. You must have completed your escrow by April 30, 2010, or have a binding purchase contract and close escrow by June 30, 2010. The income limits for the Move Up/Repeat Home Buyer Tax Credit is the same as the First-Time Home Buyers credit.
I know that we all hear different bits of information that their will be a flood of REO/Bank Owned properties coming on the market. I have personally heard this many times for the past year, that it is coming. I haven’t seen it. I did see a bunch of REO/Bank Owned properties hit one specific area recently but that was about it. The inventory of these types of properties seems to have dwindled recently. While Buyers wait for this “flood” of REO/Bank Owned properties the interest rates could go up. I say “could” because you hear grumblings about it now and again. Additionally, with the new FHA regulations coming down the pike, it may not behoove a Buyer to wait for this potentially phantom flood of homes for the Buyer may face stiffer reguirements in obtaining a loan, pay a higher interest rate and could possibly miss the time limit for the tax credits. My advice to Buyers, if you are on the fence, get off it and start looking. Find a no-pressure Realtor who will show you everything that may suit your criteria, that way you will be familiar with what the prices are in the different locations..what is out there. You will be much better prepared to make that big decision to purchase as you will be armed with knowledge.