I previously reported (in haste I admit) that the $8000 credit could be used as downpayment- however, that went out the window almost as soon as it was announced.
It has been officially announced, however, and this time it stuck, that the credit can be used towards closing costs.
How does it work? Well, its basically a short-term loan with the tax credit used as collateral.
A buyer has to buy a property between Jan 1, 20098 and Dec 1, 2009.
That's right, DECEMBER 1ST, not 31st!!
The credit is 10% of the purchase price of the home, up to $80,000. So, for most buyers in our area, they would qualify for the max credit, since most properties are well above $80,000.
The credit applies to first-time homebuyers only - those who have not owned a home in three years or more. Also, both parties in a marriage must meet this test.
Individuals with an adjusted gross income of $75,000 or less OR couples with a joint AGI of $150,000 or less qualify for the full credit. The credit is phased out as income increases. An Individual AGI of $95,000 or more or $170,000 for couples puts you out of the running for the credit.
The tax credit does not have to be repaid, so long as the buyer stays in the property a minimum of three years.
Different government agencies, non-profits and FHA-approved mortgagees can provide these bridge loans secured by the anticipated tax credit.
So, if you've been putting it off- now is the time!