Home Buying in 08401>Question Details

Bigjdiesel, Other/Just Looking in Atlantic City, NJ

Owner financing

Asked by Bigjdiesel, Atlantic City, NJ Mon Dec 14, 2009

Is buying a condo with owner financing a possible way of getting a condo and getting the $8000 tax credit if i currently wouldn't qualify, but I would be able to in like 7 months.. That would be after the 4/30 deadline and I would really like to take advantage of the tax credit.. I have student loans in rehabilitation, but it won't be done til August and fha doesn't do mortgages in default.... thanks in advance.....

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Like you said, you have until the end of April to be under contract and you have until the end of June to close in order to qualify for the $8000.00 Tax Credit, if your a first time home buyer. I would try to find a Mortgage Broker that can assist you with getting approved for the mortgage in your situation with the student loans. Also if you need a down payment, NJ has a program called TCLP that allows you to obtain the tax credit upfront to assist with the down payment to purchase the property, it may also help you get approved for the mortgage. Check the web reference for more info.
0 votes Thank Flag Link Fri Jan 29, 2010
Yes you can still qualify for the $8,000 tax credit. Great information Al. If you need help in locating a property let me know.

Best wishes,

Matt
Web Reference: http://HavilandGroup.net
0 votes Thank Flag Link Mon Dec 14, 2009
You absolutely can get the $8,000 tax credit from the IRS if you purchase with owner financing-even if the owner holds on to the title until the mortgage is paid off. Here is a cut and paste from the IRS website:

Q. Can a taxpayer claim the first-time homebuyer credit if the purchase is pursuant to a seller financing arrangement (for example, a contract for deed, installment land sale contract, or long-term land contract), and the seller retains legal title to secure the taxpayer's payment obligations?

A. If the taxpayer obtains the "benefits and burdens" of ownership of a residence in a seller financing arrangement, then the taxpayer can claim the credit even though the seller retains legal title. Factors that indicate that a taxpayer has the benefits and burdens of ownership include: 1. the right of possession, 2. the right to obtain legal title upon full payment of the purchase price, 3. the right to construct improvements, 4. the obligation to pay property taxes, 5. the risk of loss, 6. the responsibility to insure the property and 7. the duty to maintain the property. (7/2/09)
0 votes Thank Flag Link Mon Dec 14, 2009
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