Exciting News!  After much debate the tax credit has been extended but there are some catches.

• Catch 1:  Although the Tax credit has been extended through June 30th 2010 you MUST have a signed contract by April 30th 2010.  And these transactions will be highly scrutinized by the IRS due to all of the fraud going on with the current tax credit programs of last year and this year. 
  
• Catch 2: You still must live in the home for at least 3 years or you must pay back the tax credit.
• Catch 3: Documentation requirements are higher.  So when you apply to the IRS for the tax credit make sure you keep ALL of your closing docs at hand!
• Catch 4: It is important to note that you cannot purchase a home from, among other family members, your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse or your spouse’s family members.
• Catch 5: Repeat/Existing Buyers $6,500 Tax credit:: Income Limits are the same ans the first time home buyer credit but to qualify as move-up home buyer (“long-time resident”) as a home owner who has owned and resided in a home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers, the law tests the home ownership history of both the home buyer and the spouse. Repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit.
• Income limits raised to $225k/year for couples filing jointly and $125k.year for single or couples filing separately.
• Finally, nothing has changed regarding credit.  I've had prospective homebuyers contact me needing to work on their credit and this has not changed.

As with ALL tax matters Please consult with your tax adviser for more information. Also see IRS Form 5405.

This is exciting for many home buyers out there but just be aware to know the catches to avoid an IRS audit.  For more questuins on finance feel free to Contact out office at (832) 519-0695. HoustonMortgageBank.com