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What do we know about the $8,000 Tax Credit for this year’s first time home buyers — Part of the new $787 Billion Stimulus Plan? Here, we’ll shed some light on the bill that has house hunters talking.

What’s different about this year’s first-time home buyer’s tax credit?

Well, let’s talk about the obvious difference. Last year’s tax credit for first-time home buyers was for $7,500, so this year’s $8,000 credit will give you an additional $500 or up to 10% of the purchase price of your home (whichever is less). But the biggest difference between the two in the eyes of a home buyer is probably this: Last year’s tax credit had to be paid back over the following 15 years. In essence, it was an interest-free loan. But this year’s tax credit is exactly that, a credit. The $8,000 does not have to be paid back at any time.

Who can qualify for the $8,000 first-time home buyer’s tax credit?

At this point in time, those who purchased their first home in 2008 under the provisions of the former $7,500 credit won’t qualify for the upgraded plan. House hunters who buy their homes between Jan. 1 and Dec. 1 of 2009 could qualify for the $8,000 (true) credit. There are, of course, particular criterion for qualifying:

• To qualify as a “first-time home buyer” you must have not owned or co-owned a home within the three years prior to this year’s closing date.

• Household income is a factor as well. To be eligible, adjusted gross income for single taxpayers can be up to $75,000, and $150,000 for dual-income families filing jointly.

• The new $8,000 tax program also allows purchases financed with state and local tax-exempt mortgage-revenue-bond programs — different from last year’s tax incentive.

• As a first-time home buyer, you should know that your new home must be used as your principal residence (not a second home or investment property).

How will the $8,000 first-time home buyers tax credit help?

Good question. There’s no telling for sure, but the National Association of Realtors projects that 300,000 more houses will sell during 2009 as a direct result of the new $8,000 credit. If you’re considering buying a home, there’s no better time. So get your real estate agent from In-House Realty and your pre-approval and hop to home shopping.

If you’ve owned a home previously, you’ll only get the tax credit if your last home purchase was 3 or more years ago. Also, keep in mind this tax credit is only good through the end of 2009. Happy house hunting!

Related Info

• Get started buying a home.
• If you’re looking for a real estate agent, In-House Realty will match you with an approved agent in your area at no cost!
• Learn about buying a home from our home purchase library of articles.
• Check all our our home loan options and find today’s mortgage rates to get started toward your $8,000 tax credit.

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