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Housing Amendment in Stimulus Package Leaning to $8000 Tax Credit

Date:February 12, 2009 | Author:Diane Tuman | Category:8000 tax credit

Details have not yet been ironed out, but the proposed $15,000 tax credit amendment in the economic stimulus package that was sponsored by Sen. Johnny Isakson has been trimmed down to an $8000 tax credit, according to the NY Times. This is all very preliminary until the bill is actually signed, but here is the before ‘n after of what’s been thrown around:

Before:

$15,000 tax credit
Available for all home buyers
No repayment necessary

After:

$8000 tax credit
Available for first-time home buyers within certain income limits
Repayment? Not known at this time

Details on the bill could come this afternoon or tomorrow, but it is expected to be signed by President Obama by Monday.

What do you think? See Zillow Advice for discussions on:

Stimulus plan… should I wait or should I buy?

Anyone know details on the $8000 tax credit plan?

Would $8000 make first-time homebuyers buy now?

Update: Here are more details of what is being proposed from Senate Finance, House Ways & Means Committee: Page 2 under “Refundable First-Time Home Buyer Credit.”

Do you qualify for the $8,000 First-Time Home Buyer Tax Credit?

Answer these questions to see if you qualify for the $8,000 first-time home buyer tax credit. Or, if you have a Web site or blog, add the $8,000 first-time home buyer tax credit widget to your site. It’s free and fun content to keep your visitors engaged, plus you get free co-branding.

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Responses (66)

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Morgan Sam 9:54 PM - Feb 19,2009

Did any of the software or online providers like taxact,turbotax etc update for $8000.00 credit
De 11:02 AM - Feb 20,2009

The IRS had posted the updated first time homebuyers credit, link http://www.irs.gov/pub/irs-pdf/f5405.pdf

I talked to the IRS and they told me if you took the credit on your 2008 tax return for a home you purchased this year (2009) just file an amended return 1040X to claim the extra $500.

I hope this helps everyone.
Dan 8:33 AM - Feb 22,2009

Would I be able to quality for the $8000 tax credit under the following situation?

I was married in 2002 and bought a house with my former wife. We divorced in 2003 and also sold the house that same year. I remarried in 2006. My current wife built her home in 2004, in which we both currently live. My name has never been on her loan, and she has made all of the monthly payments herself. If we sell our current home and purchase a new home before December 1, 2009, is there any way that we will be able to qualify for the tax credit? My guess is no (unless I qualified for the new loan myself, but I doubt this will be the situation), but I thought it would be worth asking in case there is a way that we can qualify since I personally have not owned a home in the past 3 years. Basically I was wondering if it would be possible to put my wife as a co-borrower and still qualify for the tax credit.

Thanks.
Dawn 8:49 AM - Feb 22,2009

Dan–

My banker explained that if you filed a joint tax return in the past 3 years with your wife and claimed the house interest you would not be a “first time homebuyer.”
DON CAMPBELL 4:14 PM - Feb 22,2009

IF I OWN A RENTAL HOME THAT I HAS NEVER BEEN MY PRIMARY RESIDENTS (I NEVER LIVED IN) DO I QUALIFY FOR THE $8000 TAX CREDIT TO PURCHASE A PRIMARY RESIDENTS?
Dcamp 4:17 PM - Feb 22,2009

I OWN A RENTAL HOME THAT I HAS NEVER BEEN MY PRIMARY RESIDENTS (I NEVER LIVED IN) DO I QUALIFY FOR THE $8000 TAX CREDIT TO PURCHASE A PRIMARY RESIDENTS?
I'm Curious 5:12 PM - Feb 25,2009

For those that purchased a home recently or have financing ready to acquire a primary home, what are lenders requiring as a down payment?

10%, 15%, 20%+ ???
Jessica Klaaren 10:59 PM - Mar 5,2009

I would just like to say, my husband and I after a failed business attempt just over 2 years ago had to file bankruptcy. Today we have good credit and 8 thousand in the bank (ours not the credit) and are as of 4 pm officially homeowners with a 5.75% Rural development loan fixed rate, no penalty loan. There are plenty of incentives out there other than the tax credit. We got our dream home for 86% of the appraised value. The point is, if you are smart and patient, and if you work toward a goal, anything is possible. Oh and there are really good loan programs right now, I mean, RDL loans are used in several areas around the country and they are fantastic. I literally found out today at my closing that I could ammend my tax return to claim the $8,000. I definitely want to do that b/c we will be making over 75K in 2009 and I’d like to get the whole 8 grand, but since our plan hadn’t included it yet, we are going to pay off the 1 grand of credit card debt and put the rest in savings to earn interest until next year comes. I am a Realtor who does market appraisals for banks who are starting the foreclosure process on a house, and they hire me to valuate the property for them to give them an idea of what its worth, if its worth it for them to foreclose, etc. and so many of them have put all of their savings into the house, everything, and the houses just won’t sell for what they are worth, and jobs are lost and next thing you know you are left with nothing. So my advice would be… ask seller’s to pay up to 6% of your closing costs or whatever your loan type allows, ask them to provide a home warranty to cover any problems that may arise, get quotes from 2 or 3 lenders and go with your gut on who’s going to work the hardest for you, and finally, save your money for God’s sake. The kitchen doesn’t need renovated this year. Be Patient, because it can’t hurt you, but it could save you – at least support you temporarily – if the unthinkable happened and you lost your job.
Jessica Klaaren 11:04 PM - Mar 5,2009

I’m Curious – FHA loans require a 3.5% down payment. You can have seller’s pay your 6% closing costs, just write it into the contract or your Realtor can do this. RDL loans (must meet income criteria but very easy to get approved and low rates) these are 100% loans and require no downpayment. I live in East TN in a rural area, so our property values are probably lower than most places. I would suggest asking around for a name of someone local – a mortgage broker – and then call them up and ask them, because every company has different lenders and programs that vary between areas and values.
Jennifer 12:58 PM - May 13,2009

The Real Estate Market will help turn around the economy — Sellers can not move on if they can’t sell and Renters can’t move up if they can’t buy!! I think its a great idea that the $8000 is now available as a bridge loan — it will help buyers get into a first home– I agree there should be income caps and purchase price caps — This is for the people starting out or trying to do better — If you have large enough income to afford a higer priced home you should have enough sense to save for down payment.
Sharon V. Watson 4:14 AM - Jul 23,2010

We are now dealing with the number of home buyers that believe that since the last tax credit expired and the new one was “better” that they will just wait and see what comes along.