First-time homebuyers may be able to take advantage of a tax credit for homes purchased in 2009. The credit:
The credit is claimed using Form 5405.
The American Recovery and Reinvestment Act of 2009 expanded the first-time homebuyer credit by increasing the credit amount to $8,000.00 for purchases made in Dec. 1, 2009.
For home purchased this year, the credit will not have to be paid back unless the home ceases to be the taxpayer's main residence within a three-year period following the purchase.
First-time homebuyers who purchase a home in 2009 can claim the credit on either a 2009 tax return, due April 15, 2010. The credit cannot be claimed before the closing date. But, if the closing occurs after April 15, 2009, a taxpayer can still claim it on a 2008 tax return by requesting an extension of time to file or by filing an amended return.
By: The Associated Press | 29 May 2009
Thousands of first-time homebuyers will be able to get short-term loans so they can quickly make use of a new $8,000 tax credit to pay for some of the costs of buying a home purchase.
The Federal Housing Administration on Friday released details of a plan in which borrowers who use FHA loans can get advances from lenders that let them effectively receive the credit in advance, so they don't have to wait to get the money from the IRS.
Most borrowers will still have to come up with the FHA's required 3.5 percent down payment, unless they work through a state or local housing agency or an approved nonprofit. But there are many other potential uses, such as for closing costs and fees, or to beef up the down payment beyond the minimum level.
The FHA which insures about a quarter of new home loans, is projected to guarantee about 2.2 million loans in the next budget year.
Any buyer who has not owned a home in the past three years is considered a first-time buyer and eligible for the program. Borrowers can claim the credit by filing an amended 2008 tax return or can wait for their 2009 return.
The change "will present an enormous benefit for communities struggling to deal with an oversupply of housing," Housing Secretary Shaun Donovan said in a statement.
The tax credit was included in the economic stimulus package signed by President Barack Obama in February. It is not available to individuals with incomes above $95,000 or couples with incomes above $170,000 and expires Nov. 30.
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