The Housing and Economic Recovery Act of 2008

Posted on: August 14, 2008

I posted recently about the landmark legislation aimed at ending the current downturn in the housing industry, helping homebuyers and strapped borrower and strengthening the housing finance system.

John Coneys of National City Mortgage, came and spoke with our agents today to help them understand how some of the elements of the Act will help our clients. The highlight of the presentation was his explanation of the $7500 tax credit to First Time Homebuyers for the purchase of a primary residence.

The important points include:

  • The tax credit is available to first-home buyers only (first-time homebuyers are defined as anyone who has not owned a home in the last three years).
  • The maximum credit amount is $7,500.
  • The credit is available for homes purchased on or after April 9, 2008 and before July 1, 2009.
  • Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit. If taxpayers exceed the income limits, they will qualify for partial credit.
  • The tax credit operates like a zero-interest loan. Homebuyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house.
  • Eligible purchasers will claim the credit on the appropriate IRS Form 1040 Tax Return and/or on any special forms the IRS might devise.

All of this information and more can be found at http://www.federalhousingtaxcredit.com.

 

Posted by Paul Walsh