As part of the "Housing and Economic Recovery Act of 2008" which was recently signed into law, Congress has created a new temporary Tax Credit as an incentive for first time home buyers. This is really a good deal and should assist numerous First Time Home Buyers to start the American dream of home ownership. Major components of this new law are:

* To qualify new or resale Homes must be purchased on or after April 9, 2008 and before July1, 2009

* Tax Credit is available to first time Home Buyers only.

* The maximum amount of tax credit is $7,500. Remember a tax Credit reduces dollar for dollar the FIT a family or individual owes to the US Treasury.

* The tax credit works like a 15 year interest-free loan and must be repaid over the 15 year period.

* Single Taxpayers with incomes up to $75,000 and married taxpayers with incomes up to $150,000 qualify for the full tax credit. There are more income tests which are beyond the scope of this blog.

* A " First Time Home Buyer" is a buyer who has not owned a principal residence during the three-year period prior to the purchase. Married couples tests the  homeownership history for both the home buyer and his/her spouse.

* The credit will be claimed on your Federal Income Tax return.. So its easy with no preapprovals or required forms.

* Generally the tax credit is equal to 10% of the qualified home purchase price  but the credit amount is capped or limited to a maximum of $7,500.

 This is big news for first time home buyers and gives many an opportunity of a lifetime.

Call me if you want additional data about this tax situation or if you want to start looking for a home so you can take advantage of this great tax credit