If I understand your question, I would just like to add that it is a tax credit as opposed to a tax deduction. If it was a deduction then you would just take $8000 off your gross income for the year and it would lower the amount of taxes you pay by (your tax rate) X $8,000, but because it is an actual tax credit not a deduction, you actually subtract $8,000 from the amount of total taxes you would have otherwise paid. So, if at the end of doing your taxes your tax form shows the total amount of federal taxes you would owe is, say $12,000, and your W-2 shows you have already contributed $13,000 through your payroll deductions then you would normally get a $1000 tax refund check, but with the $8000 homebuyer tax credit added in you would get a $9000 tax refund check instead.
All of that is assuming you qualify for the credit to begin with.
I hope this answered your question.


Ann Davis

Everyone has given you great answers, but take a look at the website below and it will answer all your questions.

Hello Mr Chapman,
The below info looks pretty accurate. I had a client close on his home the end of Feb and he got his $8000.00 check from the IRS in April by amending his 2008 taxes.

I would be more than happy to go over specific questions with you but would also highly recommend you talk with a tax professional before jumping in to make sure your specific set of circumstances are addressed accurately. Feel free to contact me.

Hank Paterson
Broker
503-803-7204

J.

Hustle up on the homes purchase side. Rates are rising and that credit runs out 12-1. I am happy to help you find some great deals.

Call me anytime.

Thanks

Dirk Knudsen
Re/Max Hall of Fame
503-799-8383

Hi Terie & J

short and simple - it is not just a credit - it may be CASH back if you don't owe any taxes... buyers in '09 may claim the credit on their '08 taxes.....you may file an amended tax return for 2008, rather than wait for 2009 - you will need to send an amended tax return with the 1st time buyers claim Form # 5404.......I suggest you refer to your tax preparer for help and advice...the good news is, unlike the credit offered in '08, you do NOT have to repay this credit, (but you must hold onto the house for 3 years, although there are some exceptions)...

do not confuse this "09 credit program with the program that was offered for part of 2008. That capped out at 7500, and did require that the amount be repaid over a period of time.

Why not google "8000 tax credit" and you will be able to read all about it, and many questions you have will be answered.

Good luck!
Debbie

OK...layman's terms: It depends! Cheeky answer, I know. Let' me explain:
When dealing with the IRS and the Federal department of Housing and Urban Development (HUD), things are never simple. That's the first thing you need to understand.
Next, you must understand the regulations are still changing. As a matter of fact, some new guidelines were just issued over a week ago. Here's a short breakdown:

1) The tax credit is not actually cash back. Originally, it was designed that you would need to apply it as a credit towards your taxes at the end of 2009. In that case, it might have resulted in a cash back payment to you. However, the new regulation allows you to use up to $8000 towards your closing costs, eliminating the need to wait until the end of the year to claim the credit.

2) In order to use the credit during your closing, you would need to obtain an FHA bridge loan (basically a short-term loan that covers you from the time of your closing until the time you file your taxes). Some states have setup their Housing Finance Authority to disburse the loans, but Oregon isn't one of them (neither is Massachusetts - my home state). Currently the only states that offer it are Colorado, Delaware, Idaho, Kentucky, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, and Tennessee.

3) Most private lenders approved by the Federal Housing Authority (FHA) will also offer these bridge loans in the form of a personal loan or line of credit, which will be backed-up by the tax credit for which you're due. When you file your taxes at the end of the year and receive the amount of the tax credit you are eligible for, you will then have to pay back the personal loan or line of credit, in most cases WITHOUT INTEREST!

There are some restrictions on using the "bridge loan" or tax credit (the same thing in this instance) at closing:
a) The bridge loan can't result in cash back to you (the borrower);
b) The amount can't exceed the total amount of closing costs, downpayment, or prepaid expenses (such as home inspections);
c) There can be no balloon payment on the loan required before 10 years;

Benefits:

*You can use the bridge loan to lower your interest rate by increasing the amount of your down payment (after you meet the initial requirement of 3.5% down)

*You can apply the bridge loan toward your closing costs

*You can use the bridge loan to perform against other types of costs - such as energy efficiency rating inspections or radon inspections.

For more information, check out the HUD web for Oregon at:
http://www.hud.gov/local/index.cfm?state=or&topic=homeow…

Good luck!

--TMC

Per the IRS website:

First-time homebuyers may be able to take advantage of a tax credit for homes purchased in 2008 or 2009. The credit:

-Applies to purchases that close after April 8, 2008, and before Dec. 1, 2009.
-Applies only to homes used as a taxpayer's principal residence.
-Reduces a taxpayer's tax bill or increases his or her refund, dollar for dollar.
-Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.

Furthermore, HUD has issued guidance so that this credit may be used in addition to the 3.5% down payment requirement on an FHA loan. Lenders have yet to implement these guidelines. Regardless good news if you are looking to be a first time buyer :)

Good luck!

The $8000 first time home buyers tax credit can be cash back when you file your taxes next year. You need to purchase a home and have the transaction closed before December 1, 2009 in order to qualify. You can also be considered a first time home buyer is you have not owned a home for the past 3 years.

When you file your taxes, the $8000 will be a credit toward taxes owed. If you do not owe any taxes, then you will get a check back for the full amount, if you owe taxes, the amount you owe will be subtracted and you will get a check for the difference. Pretty simple.

There are some qualification for first time home buyers, with income limits, etc, so you will need to talk to a Mortgage Broker to be sure you qualify.

If you are looking for a Realtor, give me a call.

Good Luck.
Jean Pritchard
Amerivest Realty of Portland
503-680-4449