When the American Recovery and Reinvestment Act of 2009 was put in place, the idea was to give a boost to the real estate market by helping first 
time home buyers get off of the sidelines and in doing so, reduce the inventory of available homes. So who can take advantage of this program and what are the important things to know?
1. For starters, the law defines a first time home buyer as anyone who has not owned a primary residence for three years prior to making a purchase.
2. As a first time home buyer, you can qualify for a credit of up to $8,000 if you purchase a home before December 1, 2009 and keep it as your primary residence for at least 36 months. If you own a vacation home, but do not own a primary home, you can still qualify for a credit.
3. You also have to meet certain income standards. A single person earning up to $75,000 a year or a couple earning up to $150,000 can qualify.
4. Unlike the tax credit that Congress enacted in 2008, this credit does not have to be repayed.
5. The credit is only available for FHA loans. It cannot be used to finance the minimum 3.5% down payment that is required, but it can be used to finance any part of the down payment that exeeds the 3.5% or it can be used to cover closing costs. Often times, especially with first time home buyers, qualifying for a loan is just the beginning and coming up with the cash for the closing costs is difficult. This credit could go a long way to greasing the wheels.
Since the plan was put into place the beginning of the year, there have been some changes made and if you are considering taking advantage of the plan, you should consult your tax advisor and your lender. There are also a variety of useful and informative websites where you can get additional information. Here are just a few.
http://www.federalhousingtaxcredit.com/2009/glance.php
http://www.marketwatch.com/story/the-8000-first-time-home-buyer
http://www.irs.gov/newsroom/article/0,,id=204671,00.html
http://www.usnews.com/blogs/the-home-front/2009/05/29/the-8000-first-time-home-buyer-tax-credit-program-expands-5-things-to-know.html
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