Need more information on NEW first time Buyer $8000 tax credit?

Asked by Jonathan Mohney, Bloomington, IN Sat Feb 21, 2009

Summary:
- First Time Buyer means Haven't owned a home in last 3 years.
- Buy house/condo between Jan 1 and Dec 1, 2009
- Use home as primary residence for next 3 years.
- Get 10% of home price up to $8000 tax credit.
- May elect to take in 2008 or 2009 taxes. May amend 2008 return if already filed.
- Get cash from the government even if no taxes owed.
- Never have to pay back, unless you sell in next three years.

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Answers

4
Jonathan Moh…, , Bloomington, IN
Tue Feb 24, 2009
There one issue I have with the last answer is, you don't have to wait until 2009 taxes to get your check. As soon as you close on the home, you can amend your 2008 taxes and get the refund. The answer does provide a way to get some money towards a down payment, but unless you have really large federal tax withholding, you won't get anywhere near the $8,000. I provide a way to get that money now. When you buy one of our new homes, i will provide a loan for that money at closing. It is dependent upon your lending institution and underwriting on whether this money can count towards your down payment though.
0 votes
Mark Kleinba…, Agent, Bloomington, IN
Mon Feb 23, 2009
The information posted so far is correct, but below is a why to start accessing the credit before you buy a house. This may be a good way to save a larger down payment especially if you are willing or needing to wait until later this year to buy:

Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?

Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment.

Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.

Further, rule changes made as part of the economic stimulus legislation allow home buyers to claim the tax credit and participate in a program financed by tax-exempt bonds. Some state housing finance agencies, such as the Missouri Housing Development Commission, have introduced programs that provide short-term credit acceleration loans that may be used to fund a downpayment. Prospective home buyers should inquire with their state housing finance agency to determine the availability of such a program in their community.
0 votes
Dave Woodson, Agent, Valparaiso, IN
Sat Feb 21, 2009
Yes, you are correct, you can get more information @ http://www.madmortgagemachin.com

Dave Woodson
Serving all of Indiana
0 votes
Jonathan Moh…, , Bloomington, IN
Sat Feb 21, 2009
We will work with your situation on using this for a down payment. For more information, visit our website.
Web Reference:  http://www.mohneyhomes.com
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