The First Time Home Buyer Tax Credit of 2010

Okay—so here’s why you REALLY want to buy a house in the first half of 2010…

Houses are C-H-E-A-P!  I mean CHEAP!! I’ve been in this business, in North Carolina decades, and I’ve never seen home prices so AFFORDABLE (read CHEAP!)!

Mortgage Rates are L-O-W! It does not look like this is going to continue to be the case, as “Big Ben” (and the Fed) announced he is going to stop purchasing Mortgage Backed Securities in March (which will force rates higher).

The Government is G-I-V-I-N-G you a tax credit of $8000 or 10% of the home’s value. If you are a First Time Home Buyer! So if you buy a really nice $250,000 house—that’s $8,000 for furniture, pay off your college loans, buy a car, big screen TV… or to just plain ole save!  $8,000!!!

There are a couple of restrictions / things to remember:

• Some States are helping the Tax Credit to be used as a down payment.  Unfortunately, the State of North Carolina does not have the funds to be able to offer this grant program.

• Homes that cost more than $800,000 aren’t eligible for the credit
• You must be over 18 years old to claim the credit (dependents are not eligible to claim the credit either).
• Those who sell their new home or stop using it as their main residence within three years would have to repay the credit.
• You cannot claim the credit if acquired your home by gift or inheritance OR if you acquired your home from a related person.

If two or more unmarried individuals buy a main home, they can allocate the credit among the individual owners using any reasonable method. The total amount allocated cannot exceed the smaller of $8,000 or 10% of the purchase price. Note: A reasonable method is any method that does not allocate all or a part of the credit to a co-owner who is not eligible to claim that part of the credit (I would go with 50/50 as a reasonable method if one person is not eligible for the credit)

The way you determine which credit you are eligible for is based upon the purchase date. Only homes purchased from Jan 1 2009 to April 1st 2010 are eligible for the fully refundable $8000 credit.

If you constructed your main home, you are treated as having purchased it on the date you first occupied it.

Foreign or Overseas Homes: You are considered a first time home buyer when buying an American residence, even if you owned principal residence outside of the United States within the previous three years. Non-resident alien’s cannot claim the credit. In addition to this, in order to qualify for a mortgage – you must have a two year US Credit History (FNMA and FHLMC changed rules in December of 2009).

Members of the Armed Forces and certain federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and still qualify for the credit.

An eligible taxpayer must buy or enter into a binding contract to buy a home by April 30, 2011, and close on that purchase by June 30, 2011.

For more details on the Tax Credit and Frequently Asked Questions, click here.

First Time Home Buyers should purchase a home NOW, because houses are CHEAP, mortgage interest rates are LOW, and the Government is GIVING YOU up to $8,000!!!  WOW!

If you have questions about buying a home in RTP, or want to get pre-qualified for a mortgage loan in Raleigh NC, please contact Steve and Eleanor Thorne, Connect With Us on Facebook, Inc in Cary, NC  919-649-5058