Under President Obama, there have been some important changes in the housing and mortgage industries which have direct effects on home buyers and home owners.
One of the biggest changes is the up-to $8000 home buyer tax credit through the Federal Housing Administration. The major points relevant to this credit that most buyers should know are:
-Unlike the $7500 tax credit during the Bush administration, this 2009 tax credit does not need to be repaid (conditions apply – visit the IRS website linked to below for more information).
-First-time buyers only. First-timers are buyers that haven’t purchased or owned a primary residence within the last 3 years.
-Income qualifications apply: $75,000 for single buyers; $150,000 for married couples.
-The credit is available for all purchases that are purchased between January 1, 2009 and December 1, 2009.
One common question: “What if one party in a married couple owns their current residence prior to their marriage, does the credit apply.” Simple answer: No.
For more information, one great resource is the IRS page on the tax credit, which is a part of the 2009 American Recovery and Reinvestment Act.
IRS Tax Credit Page
***MAY 2009 UPDATE***
Last week, the legislature passed a law which will allow this $8000 tax credit to be applied to the downpayment and/or the closing costs associated with a home purchase. Read more about it on the state legislature's official online newsletter, The Capitol Record, which is available at the link below:
NEW WA State Tax Credit Benefits
***JUNE/JULY 09 UPDATE***
Unfortunately, the IRS invalidated the idea that homebuyers could claim the credit before the purchase, to be used for paying closing costs and fees associated with the purchase of a home. Rationally, it makes sense. The credit is a tax refund on a purchase that has already happened. The proposed closing cost credit would've allowed potential buyers access to future tax savings before the purchase was completed. However, FHA and VA loans may be exceptions - talk to your mortgage professional for more guidance.
