Senate votes to renew tax credit for first-time home buyers

The Senate voted Wednesday to renew the government's $8,000 tax credit for first-time home buyers through the first six months of next year as part of a broader bill designed to extend unemployment benefits.
For the first time, the tax credit program would also enable many homeowners who buy a new primary residence to receive a $6,500 refund.
The measure was attached to a bill that would provide 20 weeks of unemployment benefits in more than two dozen states with jobless rates above 8.5 percent and up to 14 weeks elsewhere. Another provision in the bill would allow businesses that had operating losses in 2008 and 2009 to seek refunds for taxes paid on profits over the past five years. read more

Senate Close to Deal Replacing Homebuyer Tax Credit

U.S. Senate leaders moved closer to an agreement replacing an expiring $8,000 tax credit for first- time homebuyers with a smaller one that would expand access to so-called step-up purchasers, two people familiar with the matter said.

The deal would reduce the size of the tax credit to 10 percent of the sale’s price, capped at $7,290, the people said. The credit would be available on home purchases that are under contract by April 30, and borrowers would have 60 days more to close the sale. The existing credit is due to end Nov. 30. read more

How to Qualify for the $8,000 Tax Credit

Here are some general guidelines to qualify for the $8,000 Tax Credit:

Eligible Property: Any single-family residence (including condos, co-ops, and townhouses). All principal residences are eligible.

Refundable?: Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of the tax credit will be refunded to the purchaser.

Income Limit: Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000).

First-time Homebuyer Only: Purchaser (and purchaser’s spouse) may not have owned a principal residence in the 3 years prior to purchase date.

Revenue Bond Financing: Purchasers who utilize revenue bond financing can use credit.

Repayment: No repayment for purchases on or after January 1, 2009 and before December 1, 2009.

Questions? Contact Jenny Phung at 972-731-0165, email jenny@jennyloans.com, or visit my website at http://www.jennyloans.com/.