Part of the recent Housing Stimulus package is a much publicized First Time Home Buyer Credit!   It is not a credit.  It is 15 year Interest FREE loan.  Gotta take anything For Free.  This applies to any home purchased between April 8, 2008 and July 1, 2009.  How and why they picked those dates; don't ask me.   

 To qualify you must not have owned a home in the last 3 years.  The credit is 10% of your home purchase up to $7500. (Half for married filing separately)  It is applied to your 2008 federal income tax and if you don't owe that much you will receive the difference in a check.  I suggest to those whom qualify for this to increase your deductions now so you can take more money home today.  This Loan/Credit must be repaid in equal installments over 15 years.  It must be paid if the home is sold.  No mention if it is refinanced.  Get this, if you die, (Hope Not)the balance is forgiven.  Check with your tax preparer the consequence if only one spouse dies and for the exact criteria.  The credit does get reduced and then eliminated if adjusted gross income for couples is between $150,000-$170,000. 

Does this Stimulate the Housing Market?  I don't think so.  It rewards Home Buyers and that is great.  If they offered this money upfront to be credited for repairs or remodeling it would have been a much greater stimulus for home buying.  It would have improved neighborhoods and helped more first time home buyers.  Many first time home buyers see homes that would work for them but need repairs before moving in.  The buyers don't have the extra cash so they choose to continue renting. 

If I were President (Not saying I want to be) I would have pushed for upfront money payable to licensed contractors up to 10% of the purchase price or 50% of required work which ever is less.  That would have truly helped first time buyers, neighborhoods and employment.  It would have been harder to monitor but rewarding buyers after the purchase is a nice bonus but not stimulating enough to me. 

 www.leesellsmore.com

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