A strange thought hit me today regarding the First Time Homebuyer Tax Credit.
From the first, I've wondered if the credit would cause some people who really couldn't afford to buy a home to go forward even when they shouldn't. From what I've read, some programs were in place to allow those first time buyers to use the tax credit as a part of their down payment or closing costs - meaning they were cash-shy from the outset.
I saw the whole thing as just one more way to push the wrong people into buying a home - much like the zero down, "hardly any interest" Adjustable Rate Mortgages did.
So my question is ... since the credit is only good if you stay in that home for 3 years, what happens if some of those buyers default before the 3 years have passed?
Will the IRS come back and tell them they now owe the $8,000 back?
Anyone know the answer?
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