First Time Home Buyers Tax Credit

The American Recovery and Reinvestment Act of 2009 was one of many stimulus programs to crop up this year. This act provides up to $8,000 for qualified first time home buyers who buy their home between January 1 of 2009 and December 1, 2009. This tax credit is actually ending soon as prospective buyers must have their financing in order by the end of October and time is getting short.

A first time homebuyer is defined for this program as anyone who has not owned a principal residence for three or more years prior to the purchase. For married people this applies to both spouses so if one of you has owned a primary residence then you both do not qualify.

The amount of the credit is not set at $8,000 but varies according to the home?s purchase price. The tax credit is set at 10% of the home?s purchase price and maxes out at $8,000. There is also a limit on claiming the credit. The general guideline is $75,000 per person or $150,000 per married couple. This doesn?t necessarily mean that people over the income level can?t get a tax credit, they can but have to follow a formula to determine how much they?ll receive.

If you are still thinking about cashing in on the American Recovery and Reinvestment Act of 2009 then you had better rush out to your mortgage lender immediately to make sure you?re in time to qualify.