First Time Home Buyers – Buy a Home Now – $7500 Tax Credit

home in Barrington IL

President Bush on July 30 2008 signed an important housing bill.   Creating an incentive for first time home buyers to buy now and not wait.   So many of the home buyers are waiting.   Waiting for what?   Home prices are low, interest rates are low, inventory (choices) of homes on the market is very high and now there is a tax credit similar to an interest free loan.

Some of $7500 Tax Credit guidelines include:

The home must be in the United States.

Principal Residences only purchased between April 9, 2008 and July 1, 2009.

A Principal   Residence is a home that a person lives in more than 50% of their time.

First time home buyers only.   Any buyer that has not owned a property in 3 years or more.

The income restriction is an individual filing single (head of household) $75000 and couples filing jointly $150000.

The total tax credit is for $7500 it does not matter how many people are purchasing the home.

The total amount of credit is 10% of the purchase price of the home not to exceed $7500.

If the home is purchased through tax-exempt bond related financing, the purchaser is not eligable for the tax credit.

The program is a loan.   To be paid back within 15 years at 6.67 % a year with no interest.

If the home is sold the balance of the loan is to be paid from the proceeds of the home.

Repayments will start about 2 years after the  loan on the tax return.

If a buyer purchases a home before June 30 2009 and wants to claim it for 2008 they can treat it like they purchased it on Dec 21, 2008 so they can claim it on their 2008 taxes.  

The credit cannot be used as a down payment, it is a tax credit.

There are currently no forms to fill out, just claim the credit on your IRS Form 1040 tax return or on any forms the IRS may devise.   The home purchase will be reported to the IRS by the settlement officer at the property closing.

This information is compiled from  article Association outlines new home-buyer tax credit.

For more information on this credit or to view homes to purchase with this tax credit if you qualify click on

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Posted By:   Julie Anne – The Julie Anne Real Estate Team at Keller Williams Success Realty

Northern Illinois Real Estate AgentBarrington – Deer Park Real Estate Expert and surrounding areas


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