Everyone who has a radio, tv, Blackberry or other means of electronic media is aware ogf what the "MEDIA" keeps telling us.. the housing market is in the dumps, Congress is at an all time low rating and so they, CONGRESS, are coming to the rescue of the American Home Buying Public.
Enter the new $7500 First Time Homebuyer Tax Credit for homes bought after April 09,2008 and until July 1, 2009... if qualified one can get a TAX CREDIT off their income tax of up to $7500. Big WHOOP.
Remember they (Congress) took away the Seller funded down payment assistance programs.
Here is a handy-dandy link to read all the FAQs of the new tax credit in simple laymans terms. http://www.federalhousingtaxcredit.com/faq.php
Please please read all the print, fine or detailed or not... while this could be a break for some FirstTime homebuyers, I personally do not believe it will help the majority who are looking forward to the great American Dream of HOME OWNERSHIP.
This FAQ shows the money is to be PAID BACK with $500. a year (interest free) payments on the individuals income tax return. The other part that I think should be scrunitized is Question #16.. It states, If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven; now my questions are what constitutes insufficient profit? Who determines what is sufficient?
Since costs of selling a home vary greatly from state to state what are the guidelines? When will we know what are considered reasonable costs of selling ones home to get to the profit? Until those terms are public knowledge I am hesitant to promote this program.
While Congress may think this is a wonderful idea, how many of our first-time homebuyers have that money laying around to be able to take the Tax Credit.. remember you need to spend it first then you can claim it... and then you can repay it ... of course interest free... Yippeee Congress you did it again!
Oh yes, I have heard all the explainations about the seller funded programs are the ones going into foreclosure because the new Home owner had none of their own hard earned dollars invested, so it was easy to walk out on a home loan. Some how I don't think that is the whole story, and here we go again, tossing out the baby with the bathwater.
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