• Who Is Eligible?

• The Tax Credit is available to First-Time Home Buyers. 
• The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase.
• For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.

Payback Provisions

• It is a true Tax Credit and does not have to be repaid
• The only repayment requirement is if the home owner sells the property within three years.

Income Limits

• Home buyers who file as 'single' or 'head of household' taxpayers can claim the full amount of the tax credit if their modified adjusted gross income is less than $75,000
• For married couples filing a joint return, the income limit doubles to $150,000.
• Singles or head of household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial tax credit
• The tax credit is not available to single taxpayers who earn more than $95,000, and married couples who earn more than $150,000

How Do I Receive The Credit?

• You can either claim the credit on your 2009 income tax return or amend your 2008 if you purchased in the qualifying time frame.
• IRS Form 5405 must be filled out and filed with your 2008 or 2009 taxes.

Types of Homes That Qualify

• Single family, townhomes, or condominiums will qualify provided the home will be used as the primary residence and the buyer has not owned a primary residence in the last three years.

Other Stipulations About the Program

• You can not buy the home from a close relative (Mom, Dad, Sisiter, Brother, etc.)
• You must live in the property as your primary residence for at least 3 years
• The home can not be the result of an inheritance

Effective Dates For The Tax Credit

• First time home buyers would receive a credit for the purchase of any home on or after January 1, 2009 and before December 1, 2009
• You must actually on the sale of the home during this period
• You can not claim the credit before you close on your home

IF You Owe Taxes To The IRS

• If you owe taxes to the IRS, you will be issued the remaining amount of the credit.  For example, if you owe the IRS $5,000 then you will get a check for $3,000 (based upon qualifying for the full $8,000 credit).
• If you are due a Tax Refund of $2,000; then you will receive a check for $10,000 (based upon qualifying for the full $8,000 credit).

Getting The Credit Upfront

• The only way to get the credit upfront is to go through FHA Approved Lenders.  Secondary financing provided by the Housing Finance agencies and certain non-profit programs can be utilized as the down payment in addition to the 3.5% for closing costs which can help achieve a lower interest rate. 
• As of 6/4/09, FHA lenders in this area are not offering this program as of yet.  We will notify you when the program becomes available.

Forms

• The only form needed is the 5405.  Click here to download Form 5405.

Visit the Federal Housing Tax Credit Website For more Information