A - Have not OWNED a home in the past three years prior to closing.
B - Have the settlement date from January 1st 2009 until November 30th of 2009.
C - The tax credit is 10% of the purchase price of the home UP TO $8000.
D - Your income for the full tax credit must be less than $75K for single filer and $150K for joint filers
E - The tax credit is not repayable unless you sell the home within three (I believe) years.
Hope that helps.
Terrence Charest, e-Pro
Here are six things you need to know about the Economic Stimulus package which includes the much discussed - $8,000 first-time home buyer tax credit.
1. Eight grand, new first-time home buyers: The tax credit included in the economic stimulus legislation is much narrower than the original proposed amount. This credit is equivalent to 10 percent of the purchase price of the home--although it's capped at $8,000--and applies only to first-time home buyers and principal residences. It does not have to be repaid.
2. First time buyers defined: For the purpose of legislation, a "first-time home buyer" is someone who hasn't owned a principal residence for three years before purchasing a house. (The date of purchase is considered the day that title is transferred.) If you have owned a vacation home--but not a principal residence--within the past three years, you would still qualify for the credit. You would have to prove where your principal residence has been during that time.
3. 2009 buyers only: Only those who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit.
4. Income limits: The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, that's $150,000 for married couples. Those earning more than these thresholds may be eligible for reduced credits.
5. Refundable: Because the tax credit is "refundable," qualified buyers can take advantage of it even if they don't have much tax liability.
6. Recapture: Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government. (Exceptions will be made in certain cases, such as death or divorce.)
My guess (and this is just speculation mind you) is that the mortgage relief plan will actually drive the cost of borrowing (meaning interest rates) up. Mortgage relief is meant to help people in a tough situation refinance to keep their home. The costs are going to be absorbed somewhere, and I really think it will be passed along to other borrowers in the form of higher interest rates.
My advice (always) is if you can lock in a low rate then do it. You never know what rates will be tomorrow, but if they are higher then you just missed your chance. If rates drop substantially (more than 1/4%) after you lock in but before closing then most lenders have a renegotiation policy to help you get a lower rate