8,000 Tax Credit For First Time Homebuyers In New Stimulus Package

Money

by Lamar Tyler | on February 16th, 2009 | 96 comments

Man, between the extra low home prices that are currently out there and now this 8K tax credit somebody better buy something. That’s a deal on top of a deal. Check out the details below from this CNN article:

There’s a nice windfall for some homebuyers in the economic stimulus bill awaiting President Obama’s signature on Tuesday. First-time buyers can claim a credit worth $8,000 – or 10% of the home’s value, whichever is less – on their 2008 or 2009 taxes. A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill – the amount of witholding they paid during the year plus anything extra they had to pony up when they filed their returns – was less than that amount.

If his total tax liability came to $6,000, but he had $7,000 withheld from his payroll, he would normally receive a $1,000 refund. With this credit, his refund would total $8,000.

To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as “first time” buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.

Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)

Applying for the credit will be easy – or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.

The article went on to say that the Senate was actually trying to pass a 15K tax credit. I might have had to get a new house in the babies name if they pulled that one. lol. Just kidding.

BMWK what do you think? Is this good or not enough? Would this make you buy a house if you were a first time buyer that was sitting on the fence about whether to buy or not?

About the author

Lamar and Ronnie Tyler are the creators of the award-winning blog BlackandMarriedWithKids.com . They also are behind the Amazon.com bestselling DVDs Happily Ever After: A Positive Image of Black Marriage, You Saved Me and Men Ain’t Boys that explores manhood in the African American community. The Tylers are also the proud parents of four children.

Tink

My fiance and I missed purchased a home in 2008 and missed the 2008 tax credit by about a month….. is their any way around this? A girl from my work bought a house less than a month after me and got the 8000 credit. That stinks!
Tink

sorry remove the first “missed” was a mistype
http://www.chandasellsindy.com Chanda

Tink if you closed on the home on or after April 9, 2008 you should qualify for the $7500 credit. That credit is repayable over (I believe) a 15 year period. The $8,000 tax credit applies to homes purchased this year only and is does not have to be repaid (if you follow all of the criteria)… Hope this helps…

Chanda
kaye

i am having hard time getting dwnpyment b/c SHIP program i m in has no more funds. I heard amendment trying to be passed where we get 8000.00 up front upon closing, is this fact or myth?
Teena

I am closing on my first home in August 2009 and I am on private long term disability which is means I don’t file taxes. I know I can get the $8000. tax credit, but I don’t know how long it takes to get it. Could someone tell me please if they have got theirs and how long it took to actually get it?
Nicole

I think the package is a great idea to help with getting a home for families. The number one compliant is: why do the some have to pay back the money when other don’t. That’s unfair because alot of people are having hard times and the credit should be the same for everyone regardless becaese they both are First time homebuyer program. I think someone should look into the matter
C. J.

Hello:

I applied and am nervoulsy waiting, is there as site to check how long this process takes? Our Agent says there is, but the IRS web site is sketchy?
http://www.hawaiihomelistings.com David Buck

It’s a great program & worth taking advantage of before it dissappears…
Ohman

I bought on May 5th 2009 and filed my amended return on May 15th. It is now Sept 17th and I have not received any money. I have received several letters saying everything looks good. The last letter I got was dated Aug 31st and IRS said they approved my amended return. 4 months and still counting.
http://www.chandasellsindy.com Chanda

Ohman, you may want to check in on things, my client filed hers are recieved her check in less than a month….
rlee

my husand brought a house back in 2001. he was the only one on that got finance. so about a year after he did a quick claim deed for half the house so my name is on it that way. if i buy a house in my name will i be able to get the 8k creidt?
Anonymous

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Anonymous

I know of several low income single women who have filed for this tax credit, received their checks and are spending the money on bills and other things…they have no intention on buying a house and can’t afford a mortgage. As a matter of fact they both are on section 8 housing. They went to a tax professional and applied for the funds. One of them told me that she was told by the tax professional that the government would not track how they spend the money and that anyone who receives the money had to pay it back at a rate of $500 per income tax refund/per year. That bit of news had my head reeling because there are Many, Many, Many of these women receiving this money but do not have intentions on buying homes. I am so unsure about this…Someone please shed some light. Are these women in trouble? Honestly, one of them is my sister. I tried explaining to her that she would need some proof that she purchased a home or she would be in trouble. Am I right?
Elicia

I close on my home next week, 11/23, to be honest with you, I’m not sure how this works. This is my very first home, I just hope I did the right thing by buying. If anyone else out there that knows what the whole deal is about, info me please!!!
http://www.chandasellsindy.com Chanda

Elicia, Both your agent and lender should’ve been able to provide you with informaiton regarding the credit and how to claim it. You can take a look at my blog post regarding the credit and the link to the form to claim the credit:

6 Things You Should Know About the $8,000 Tax Credit
Ohman

Chanda I took your advice and called to check on the status of my return. My return went to exams. They went over it with a fine tooth comb and everything was legit and the first time home buyer was approved and my file was closed.

My husband passed away last Dec from cancer and I filed my 2008 return Married/Jointly. I was told that the reason it is still on hold is because they are trying to figure out a way to release the check in my name only. It is ridiculous really. It has been 157 days total so far. I am stuck in the system. It doesn’t seem likely that this will be resolved anytime soon. I have no choice but to be patient.
http://www.chandasellsindy.com Chanda

Ohman, Glad you followed up. Waiting does appear to be your only option at this point. Hopefully they will figure things out so they can send your check in the near future. In the meantime, enjoy your home.
http://www.carmenarruda.com Carmen Arruda

Check out this story about the extension of the housing tax credit:

http://abclocal.go.com/wabc/story?section=news/politics&id=7087955

If you want to skip it, here’s the interesting part (which they do not explain in detail):

1,400,000 homebuyers have taken advantage of the tax credit.

The story specifically states that NAR estimates that 350,000 of those wouldn’t have purchased without the tax credit, meaning 1,050,000 would still have purchased without the tax credit.

This means the total cost of the program breaks down like this:

1,400,000 x 8,000 = $11,200,000,000 (11.2 BILLION)

This means the total cost to give the 350,000 people who wouldn’t have purchased a home without the tax credit was the 11.2 Billion; which means:

11,200,000,000 / 350,000 = $32,000 per transaction

So:

It cost $32,000 for each individual who got the $8,000 tax credit, to motivate them to purchase a new home.

Wow.
http://www.latonyabynum.com LaTonya Bynum

It is time for more black people especially to consider the home mortgage option as oppose to renting for the rest of their lives. I purchased my first home at the age of 25 (2006) I wish this credit was available then but it wasn’t. Take advantage of this because I believe the government has since extended it out a little longer. Great option, need I say more?
http://www.latonyabynum.com LaTonya Bynum

For those of you who would like to learn more about how to buy a home feel free to visit my blog and search for the post titled Tips for First Time Homebuyers. It is based on my experience with purchasing my first home. I had little to no guidance when I started the process and these tips have helped over 3 people to buy their first home. It is really not that hard if you got the money and a little credit with your bank.
Paul

The stipulation that disqualifies first-time home buyers from receiving the full tax credit if they purchased in 2008 is unfair. With the new legislation anyone other than those who first took part and trusted in this program is eligible.
I am a law-abiding and taxpaying citizen and I have worked very hard to purchase my first home. I went through the full process of taking out a loan and signing a contract and it is not right that I do not qualify for this tax credit just like everyone else.
I know there are many others who also fall into this category.

I purchased in Sept of 2008. I am a single dad and get no support from ex. Kids and I have not found one program to help us. I make a single middle class income. We took the credit to pay for washer dryer etc. I see millions going to someone or some bank or some car company, but my family has not seen anything. Now my student loans have skyrocketed, my credit card companies are hitting me with more fees, my health insurance has gone up, and secretly groceries have tripled but no one says anything. This credit not being extended to those of us that first took part in the program is a disgrace and I regret having to have had to use it. The new credit is open to all home buyers. The only ones who cannot benefit from this program are those who were the first to trust it. And here is the only place I can vent… maybe 1 person will read this. Powerlinep on facebook.
Marques

I purchased my new home on August 27th. I sent off my paper work on Sept 11th. I had received a letter on October 14th stating I needed to fill out another form because the old address and the new one didn’t match (go figure). I mailed the paper work off on October 16th. I called the IRS on yesterday, and the representative told me that my check will be cut on December 18 and it will take 5 to 10 days to receive it. The rep stated that I am getting 8249.50.
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http://comcast.net maria

my yearly income comes to 8000.00 yearly been there 6 years have good credit….!!!!!!!!

have a 14 year old boy

would i qualify
http://comcast.net maria

Help me mother and brother are throwing my son and me OUT!!!!!!!!!
need help
Kimme

First of all, I am glad I ran across this site. I am a single mother with two teenagers and
I am thinking about purchasing a home, and wanted to take advantage of the stimulus program. I had several concerns and questions about purchasing a home. I didn’t want to jump out there without knowing the facts. I do have good credit and I do pay my bills on time. But I haven’t been saving money on a regular. I have made it my goal this year to save, so I can have emergency funds. Anyhow, the concerns and questions I have are listed. Please help…

1. Do I have to have money for a down payment?
2. Can lender base the mortgage according to your income? Which I do prefer..
3. If I am qualified for the stimulus, can I use the money to pay of credit dept? Also, a car loan.
I do have a car loan and wanted to pay that, so that can free up more funds.
4. Are their down payment assistance programs available? If so, do have to pay them back or do they attach it to the back of your loan?
5. Is it best for me to pay down my dept before I move into a home?
6. Should I pay off my car loan before purchasing a home?

I think these are all the questions I have so far. If I have anymore that comes to mind, I will post them.

Thank you in advance for your help…
http://yahoo Denise

I also purchased a home in Sept 2008 and took advantage of the program that was offered during that time. I think that it is unfair that we do not qualify for the $8000 tax credit. The only people that quailfy is the ones that purchase thier home from Jan. 1, 2009 thru Dec. 31, 2009 and thats not fair. They can at least give us the $7500 but instead we have to pay it back. What kind of people will suggest such.
cynthia de jesus

why is it that black married people get taken care of first when all should be served for the $8000 STIMULUS money that i applyed for 2009 before i bought my first home
and they still give me a run around , which i know they gave out cash to people who never got there homes. can you please help me out so can pay some debt aquired while trying to get my new home. thankyou
sharyl maacks

do I qualify if I am buying a mobile home? I have never owned a home and I make less than 40.000 a year
http://www.chandasellsindy.com Chanda

Sharyl,

Yes mobile homes qualify for the tax credit. You will receive 10% of the purchase price up to $8,000 so if you buy one for 40 thousand you can claim $4,000…

Hope this helps…
Amanda

My husband and I closed on our home Aug. 28, 2009 and the paperwork was received by IRS on September 8, 2009. As of today, February 11, 2010 we have not received our stimulus. We have had to send in supporting paperwork to verify that we purchased a house. We got an FHA backed loan, which means the government would have the information they needed. It is going on 6 months that we haven’t gotten anything but promises and broken promises from our wonderful government. We met each criteria to a T and still getting nowhere. Go figure.
http://Whiteandmarriedwithtwokids What

Why can you people have a websitcalled black and married with kids, but, if a white man did that it would be racist. Your people for the most part are far more racist than most white people around. You are always looking for your hand out. By the way President BARACK OBAMA is 1/2 white. So he is not the first Black president he is the first cookie president…LOL. I hope you all enjoy my post.
http://www.savingtoinvest.com Andy

Can this credit be claimed via tax software or does a manual return need to be filed?
.-= Andy´s last blog ..Things to Remember At Tax Time – Your Tax Preparation Checklist =-.
Natashia

Amanda,

I am in the same situationa as you. I closed on my house on Sept. 7, 2009 and sent in an ammendment to my tax return the same week on Sept 11. I recieved a letter from the IRS because i didn’t enclose a copy of my closing documents, which was also done as a FHA loan so they should have access to everything. But at any rate I mailed that back last week of November. I called on Dec. 10 to ensure they recieved everything and they had and my file was “assigned”. They said from the day it is “assigned” it can take up to 30 days to send the check. So I called January 20th to inquire where the refund was and they assured me that everything they needed they had and no other info is needed and that I will have the check no later than Febuary 15th. Well its Febuary 20, and still nothing. So I guess I will call again on monday to hear another story.
Rev. Georgia C.Ricks

my son-in-law purchaced a new home, lst time home buyer in August of 2009, as of March ll, 2010 , still has not received his tax credit. Natashia, he was told the same thing at first, but as of today, he was told it was still under review. This is a hard pill to swallow, with needing the credit to take care of things he would not have done if knowing the credit would have taken so long, beginning to wonder if will receive it at all! l500o checks were mailed to wrong people by mistake by IRS, wonder if our check was one of these? Please, respond, did you receive your check yet?
Rev. Georgia C.Ricks

Amada, Is it because they are
fHA Loans? My other son-in-law did not have a FHA loan, but another, he received his credit with-in 4 weeks.
a
Natashia

Rev. Ricks,
I’m sad to report that as of March 11 have have yet received my refund. When I called on the 20th to inquire where the refund was or any status the rep. That answered the phone was very argumentative when I said that I was told that I would have my check by now. She said there was no way that anyone told me that. She confirmed that my refund was still in assigned status and directed me to call that department because she didn’t have anymore information. When I was transferred the next rep had no concern for the fact that it has been so long with no refund and no follow up from the IRS for that matter. She couldn’t even tell me who my account was assigned to. Then she proceeds to tell me that it can take a year for me to get my refund. After the experience with her I contacted the tax advocate group to file a complaint. The lady from that department was very empathetic and told me that looking at the history protocal was not followed and she told me that I need to have a referral request sent (this is basically a letter telling them to do their jobs from what I can tell) by the IRS to the assigned group and they have 30 days from that date to request information or tell me the status. I received a letter about a week later telling me to send in the copy of my closing document (for the second time), my mortgage statement, my bank account with my name and address on it, and a pay stub showing the address. I have not heard anything as of yet. I will call again on Monday .What information has your son received Reverend?
George

It’s amazing. A government run program not running as smoothly as it was promised. Hmmm…I can’t wait till they get a hold of my health care. At least I can hope to get a job with good insurance benefits, I sure can’t hope to get a government with good insurance benefits. Idiots…why did you vote for Obama, you deserve the termoil.
Lee

We bought our house December 09. We had to wait a month for the proper form to be available to our tax office. We filed amended 08 return received by IRS on Jan 22. We got a letter from them on May 3rd requesting additional information: Hud statement from the previous home we sold proving it had been at least three years since our last home; Hud statement from the current house we bought in Dec 09; proof of our current address by providing copies of: vehicle registration, recent bank statement, recent mortgage billing statement, recent employment pay stub/statement. I faxed it all to the IRS- them receiving it on May 7th. I received a letter from them on May 24th telling us we should receive a response within 30 days. 30 days passed – so I called the IRS and she said to wait until June 21st – if no response by that time call back and return will be transferred to some office and become a case and should process faster. She said amended returns go to the adjustment office and that slows them down 1 – 3 months. So, basically I don’t know when we will get our check and now I decided not to run to mailbox everyday. In total its almost 6 months now. I will let you all know when I get the check.
Amanda

Ok, so we closed on our house at the end of August 09, amended return was rec’d Sept 09, contacted them over the course of 4 months about once a month. Finally we get notification in January that they need verification of residence (ie, vehicle registration, drivers license and mortgage statement) and copy of final closing HUD statement. Faxed that in and was told that I needed to wait until it was accepted which could take 30 days or more. Got a letter stating it was rec’d, but had not been processed yet, and we should find something out in 30 days. This happed twice more until FINALLY we got a letter stating that we should expect reciept of the check ($8000, plus any interest) sometime between mid April to 8 weeks after that. We finally got our check at the end of April beginning of May and paid some bills with that. So from start to finish, it was a total of 8 months that we waited. I am glad though that it came when it did. I don’t work during the summer, so it’ll help.
Anonymous

Good luck getting your money from the mother fucking thieves!!
Wife&Momof1

This home buyers tax credit is such a scam, we have been waiting on our money for about 6 months now we filed in February. It is disgusting how those con artists get their money and we are waiting here for this long. The IRS really should be more efficient about all of this. I am really disgusted with this whole situation. I am tired of all the excuses and tax advocate are really useless it’s going to take them another month just to get back to be with information on when we will recieve our money. If the money wasn’t there they shouldn’t have made the credit available at least I would have the rest of my tax return by now. People with families and homes relied on that incentive when they were making their decisions about their home and budget and are really getting screwed over. In addition our Tax advocate Valerie West is so rude and very unhelpful, these people are supposed to be on yourside and act like your bothering them when you try to get information. I spoke to her once today because she never got back to me within the seven business days I was told we would be reached by and her response is if you call it doesn’t get done any faster but I doubt she does anything at a resonable speed. I am just frustrated with the whole situation and I regret ever filing for it even though we are entitled to it because of the the added stress and aggrevation of having to deal with these incompetant assholes.
John12

I think the intent of the tax credit was good but the delivery was not so good. I know when we went to get a Mortgage we were very excited about the tax credit but it was a pain to file with the CPA and we have been waiting forever to get it.
http://www.loanrequirements.net/category/more-home-loan-sites/ Fha Loans Doublewides

I bought my home in Jan 2008. Is there ANY way that I am eligable for that 10k home buyers credit from the gov?
http://www.themortgagegalleryrockingham.com.au/ mortgage broker Perth

However, married couples cannot qualify for the credit unless both spouses meet the three-year rule. Additionally you must be 18 years or older on the date of purchase. If married, at least one spouse must be 18 or older. nnnnnn