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Real Estate Agent with Keller Williams Greater Des Moines

How the "Home Buyer Tax Credit" can help you buy your first home in Des Moines NOW!
by Brian Wentz, REALTOR

Tax credit for Des Moines First Time BuyersThis week brought first time buyers in Des Moines a new Federal Tax Credit that can be a great reason to start looking for a first home, especially if you have been sitting on the fence waiting for the right time to get into the market!

The bill, H.R. 3221, the Housing and Economic Recovery Act of 2008, passed congress and was signed into law this week, giving first time home buyers up to a $7,500 tax credit incentive to purchase a home between April 9th, 2008 and July 1st, 2009. Law makers offered the incentive to jump start entry buyers, which can have a ripple effect throughout the markets. And it may well do just that!

Unlike a tax deduction, which only saves a tax payer a partial amount, the Tax Credit program is a dollar for dollar reduction in federal taxes due, up to $7,500.

So it works like this: Lets say a first time buyer owes Uncle Sam $6,000 in federal taxes-- under the new program, eligible tax payers would see the $6,000 tax bill wiped out, and would still receive a check for the additional $1,500. A tax payer who was owed a refund of $2,000 would now receive a refund of $9,500! (Based on a married filler, making less than $150,000 a year.)

The program does have a payback provision, meaning recipients are required to pay back up to $500 each year to the IRS, for up to 15 years. But that essentially means a 15 year tax free loan from the government! Not bad, eh! And as as added incentive, if you sell the home and do not make a profit, the credit is forgiven. Alternatively, if you were to sell and make a small profit, only the amount of profit would be owed to the IRS, with the remaining balance forgiven!

The tax credit will benefit first time Des Monies home buyers' (defined as someone who has not owned in the past three years) in several key ways. Buyers may find they are able to put down larger down payments on loans, knowing they will owe less on their Federal tax bill in 2008/09. That results in lower monthly payments, and less expensive mortgage insurance premiums! But the program may also make properties which need a little work more enticing, as the cost to make repairs will be offset by the credit program. (Can you say new roof and AC??)

For more information on the details of the tax credit, visit The National Association of Home Builders' Federal Housing Tax Credit website. There you can find the program overview, as well as "Frequently Asked Questions" that will help you understand the program better.

With low interest rates, good inventory levels, and a NEW TAX CREDIT, Des Moines area home buyers should have all the incentive they need to get out of their rental and into their first home!

If you are planning to search for your first home in Des Moines, or know someone who should be, we'd like to talk with you! We still have several hard to find, SPECIAL 100% financing programs available! Discover why NOW is a great time to buy in Des Moines!

Brian Wentz & Beth Ernst
Burnett Realty


Helping you buy or sell real estate in the Des Moines Iowa area, including Ankeny, Altoona, Clive, Urbandale, West Des Moines, Waukee, and Johnston.

Tyler Osby
The Tyler Osby Team at Fairway Independent Mortgage - Urbandale, IA

Hey Brain, 

I think this tax credit is going to create some great buying opportunities for Iowans!  

Just out of curiosity - which 100% programs are you talking about here?  With a little more information about these programs some buyers may jump from being a wallflower on ActiveRain and take action!    

I hope all is well!


Tyler, The Wealth Creation Guy

Aug 11, 2008 02:44 PM