There is still time for first time home buyers to take advantage of the $8000 tax credit. Buyers must be in contract with a seller by April 30, 2010 and close on their new home by 2010 in order to receive the credit.

Aside from the topic of short sales,  the most common questions I'm asked by clients these days is about the extended first time home buyer tax credit and lately, the "move up" tax credit.

Here are a few answers to those questions:

FIRST TIME BUYERS

Q: If I'm a first time buyer, do I need to repay the $8000?

A: No. The tax credit from 2008 was in the form of a repayment, but anyone who bought between January 1, 2009 and is in contract to close on a home by April 30, 2010 (and the sale actually closes on or before June 30, 2010) will qualify

Q: I've owned a home in the past, but now for a  few years. Do I still qualify?

A: Yes. The first time home buyer status has been defined by the IRS as anyone who has not owned a principle residence during the three years preceding their purchase.

Q: I've heard there are income and purchase price limits. True?


A: True.  The tax credit will only apply to homes which are priced under $800,000.  In addition there are income limits; if you purchased between January 1, 2009 and November 6, 2009, those limits were $75,000 for a single buyer and $150,000 for couples filing jointly.  Those limits were increased with the extension in November. Current limits are: $125,000 for an individual and $225,000 for a couple.

MOVE UP BUYERS:

Q: I don't really understand if I qualify for this. What is the criteria?

A: A move up buyer must have owned and occupied their home for 5 out of the prior 8 years in order to qualify for the $6500 move-up buyer credit.

Q: Are there other differences between this and the first time buyer restrictions?

A: No. The income limits, lack of repayment and timelines are all the same as for the first time buyers.

For more information feel free to visit: federalhousingtaxcredit.com.

Thank you to the National Association of Home Builders for compiling such a great resource of information.