Orange County First Time Home Buyers are Benefitting from the $8,000 Tax Credit

The $8,000 First Time Buyer tax credit has been a real "gift" for Orange County First Time Home Buyers. This credit replaced the $7,500 tax credit that went into place in 2008. The old tax credit was repayable over 15 years. The new credit is a true Tax Credit and is not repayable.

I've Owned a Home Before. Am I still Eligible?


A first time buyer, according to the rules for eligibility, is anyone who has not owned a home with the last 3 years. So even if you owned a home for 10 years and then sold it in February 2006 (just as an example), since it has now been more than 3 years, you are eligible for the tax credit.

Can the Tax Credit be used for the Down Payment?


HUD just released information on how the Tax Credit can be used for part of the down payment above the 3.5% minimum down payment requirement, and/or closing costs. However, this is not as good as it sounds. The buyer still needs to come up with the initial 3.5% down payment, either from their own funds or a gift. It will still be better, for most people, to claim the tax credit after they have purchased a home. Remember, you can always negotiate to have the seller pay all of your closing costs anyway.

How is the First Time Home Buyer Tax credit calculated?

The tax credit is equal to 10% of the home purchase price and is capped at $8,000. Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit. Single taxpayers with incomes between $75,000 and $95,000, and married couples with incomes between $150,000 and $170,000 qualify for partial credit.

All homes purchased between January 1, 2009 and December 1, 2009 including single-family, townhomes, or condominiums will qualify for the tax credit, provided that the home is used as the principal residence. This also includes new construction homes if occupied by December 1, 2009.

The December 1 deadline to take advantage of the tax credit is approaching quick. Now is the time to get PreApproved for an FHA loan, which is the first step in the home buying process.

Orange County home buyers who want to learn more about the $8,000 First Time Home Buyer Tax Credit should follow the links for a report. FHA loan limits in Orange County, CA are very high compared to where they used to be. The Orange County FHA Jumbo loan amount now goes to $729,750, which will buy a "lot of home" in Orange County.

The tax credit work well for those buyers taking advantage of the low down payment requirements offered through an FHA loan, or even better, the 100% financing offered to those eligible for a VA loan.

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Authored by Tim Storm, CMPS, Sr. Loan Officer with Frost Mortgage Lending Group, a Direct Endorsed FHA Lender located in Orange County, CA. For information on FHA or VA, or to be prequalified please call 877-786-4243 x 7.

Posted by Tim Storm at 5/30/2009 2:17 PM
Categories: Orange County First Time Home buyer,First time buyer $8000 tax credit,FHA Loans
Tags: 8000 first time buyer tax credit Orange County FHA Loan Orange County first time buyer
 

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