The House of Ways and Means Committee recently approved a bill that enables most first-time home buyers to receive a tax credit of up to $7,500 for the purchase of a home. This tax credit will be available for owner occupied home purchases between 04/08/2008 and 04/01/2009. There are income restrictions and it is important to note that the credit is effectively an interest free loan with a 15 year repayment term. If the home is sold prior to the repayment period, the remaining balance will fall due. This bill certainly gives a great leg up to people currently renting that want to own a home.
A similar bill, HR 3221, recenlty passed by the full Senate. This bill enables all home buyers to receive a $7,000 tax credit, over two years($3,500/yr), when they purchase a foreclosed property or a recently built home (built prior to 09/01/2007). The home must be owner-occupied and there are no income limits. Unlike the previously mentioned bill, this credit is not recaptured, unless the home is sold within two years of purchase or if the property is not used as a principal residence. This is a fantastic incentive to home buyers, and a good way to diminish the higher than average inventory of foreclosures and newly built homes. Aurora, Colorado in particular, has many available deals in both categories of homes, if you know how to identify them. Many foreclosures are in great shape, or need only minor TLC. There are still opportunities to have immediate equity upon purchase, if you find the right opportunity.
For a side-by-side comparison of the two bills, go the the Realtor.org site.