Investing in Real Estate:Rules for 00 First Time Home Buyer Tax Credit

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This  is a great time for Sacramento First Time Home Buyers.

Money is falling from the sky!

00 tax credit for 1st Time Home Buyers is a great way to start the year!

There are some stipulations and there will be SCAMS out there trying to scam their way to you so KNOW your rights and understand the rules so you are NOT a victim.

Don’t believe people just because it is what you want to hear. KNOW what the facts are and don’t be taken advantage of.  Remember, to use a reputable Lender and stay away from those INTERNET lenders.  Read the U. S. Department of Housing and Urban Development letter for an understanding of the rules.

As a home buyer you can NOT use the 00 as part of your mandatory 3.5%down payment with FHA.  You MUST have 3.5% down from other sources.  You can use the 00 toward your closing costs and you can add it to the 3.5 % down payment making for more down.

The ONLY way you can use this money at the time of close is by being given a second or what we call a bridge loan from any Federal, State or local agencies and any FHA mortgagee or FHA approved nonprofit organization.

Remember, it is FRAUD if anyone tells you that you can use the 00 before you close on the house you are buying unless it is given to you as a loan through the entities I mentioned above. It is very specific.

Remember, you need to buy a house BEFORE December 1, 2009 to claim the tax credit on either your 2008 or 2009 tax return.  This applies to any first time home buyers closing on a purchase after April 8, 2008. And a first time home buyer is anyone who has NOT owned a home in the past 3 years.

This tax credit does not have to be repaid as long as you live in the house and it is your primary residence for 36 months. You can claim up to 10% of the purchase price but only up to ,000 or ,000 for married individuals filing separately. 

However, if your adjusted gross income is more than ,000 or 0,000 for joint filers than you may find this tax credit does not apply to you. Always check with your tax consultant.

You can wait and get your 00 tax credit after your home or condo closes. 

What a nice gift that would be!  Need carpet, want to paint, need appliances or furniture? This could be a God send for all those little things you might like to have when you move into your new home.

Better yet, with this economy, put it in the bank and save it for a rainy day!