Friday, November 6, 2009

It Passed! Details on the Extended and Expanded Tax Credit for Homebuyers

Did you hear it? That big woosh of air was all of those buyers, sellers, REALTORS, loan officers and title representatives that had a purchase agreement with a November 30, 2009 closing date breathing out a collective sigh of relief. An extension for the tax credit for first time homebuyers was approved by both the house and senate and is scheduled to be signed by the president today. Professionals in the industry were worried about the potential bottleneck of all the closings trying to happen before the original deadline because we all know, S*** Happens on the way to the closing table from time to time. (Yep that stands for STUF…wink, wink!) Most closings will go off without a hitch but occasionally there can be delayed a day or so. However, not closing on time could have cost some first time buyers big bucks had the extension not passed.

But, as many buyers, sellers and real estate professionals had hoped, the Homebuyer Tax Credit was not only extended but expanded to include homebuyers who have owned homes in the past. Specifically someone who has owned a home and lived in it for five consecutive years of the last eight, you could qualify for the up to a $6500 tax credit. There are guidelines and limitations so understanding the program is essential.

Here are a few key details of the plan:

  1. First time buyers qualify for up to $8000.

  2. Current Homeowners qualify for up to $6500.

  3. Purchase agreements must be written by April 30, 2010.

  4. Closing must be finalized by July 1, 2010.

  5. Income Limits are $125,000 for a single person or $225,000 for married couples.

  6. Home must not cost more than $800,000

Copyright 2009 Teri Eckholm