Go get your $7,500 15-year interest free loan from the government
Tax credit offered to new homebuyers
Expires June 30, 2009!
- Who is eligible?
- First-time homebuyers or any homebuyers who have not owned a principal residence in the last three years
- How does it work?
- Eligible purchasers can claim the $7,500 credit on their annual tax return form.
· Amount of credit: 10% of cost of home or a maximum of $7,500
- Repayment:
- Two years after the credit is claimed, the homebuyer will have to start paying it back.
- 15 equal annual installments will have to be paid back to the IRS every year.
· 6.67% of the borrowed amount or a maximum of $502
- If home is sold before 15 years, the remainder of the loan will have to be repaid to the IRS upon the sale.
· Part of the liability can be forgiven if the gain on the sale is less than the amount of the loan.
- Restrictions:
- Home purchase time limit:
· Homes purchased on or after April 9, 2008 and before July 1, 2009
- Home must be a single family residence (including condos, coops) that will be used as a principal residence.
- Home must be located in the United States.
- Home cannot be financed through mortgage revenue bonds.
- Income restriction:
· To qualify for full $7,500 credit, the taxpayer must make no more than
a. $75,000 for single returns
b. $150,000 for joint returns
· To still qualify for credit but at a lesser amount, the following income caps apply
a. $95,000 for single returns
b. $170,000 for joint returns
