Starting in 2009, President Barack Obama’s stimulus package has offered generous benefits to first-time home buyers. The credit provided up to 10% of the home’s purchase price back as tax credit, with a hefty cap of $8,000. The qualifications for the credit were simple:
- Individuals earning $75,000 or less per year or married couples earning $150,000 or less
- The home must be used as a primary residence, not as a vacation or leased residence
- The buyers must be first-time buyers, meaning they have not purchased property in the last two years
- The home must be purchased by December 1, 2009 (although later amendments increased the date to the end of April 2010)
The credit was issued on the 2010 tax return (claimed on Form 5405), with a refund issued if the credit exceeded the homeowner’s tax liability. Unless the homeowner moves from the house in the next three years, the credit does not have to be paid back.
At the same time as the Home Stimulus Credit, existing homeowners were able to take advantage of the Making Home Affordable program. This offered residents the option of refinancing their homes and negotiating with lenders in order to avoid foreclosure. The qualifications for this program are as follows:
- The home must be the primary place of residence for the individual
- The home’s value cannot exceed $729,750
A debt counselor might provide information on additional qualifications, and can work with the individual to take advantage of the best new options. More detailed information is available on government sites like the Internal Revenue Service, MakingHomeAffordable.gov, and the US Treasury website. Home lenders can also provide more information on the program, and the best plan to fit each individual.
Posted on July 13th, 2010 by admin
Filed under: Qualifications