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Buying your first home? Take Advantage of the $8,000 Federal Income Tax Credit

November 18, 2009

Buying your first home? Take Advantage of the $8,000 Federal Income Tax Credit

Congress has recently passed a federal income tax credit for first-time homebuyers that is the lesser of either 10% of the home's cost or $8,000.

This will be available to qualified first-time home buyers for the purchase of a principal residence between January 1, 2009 and before December 1, 2009.

In addition, first-time home buyers can now use the $8,000 federal tax credit to help cover a down payment and other upfront costs if they are taking out a loan backed by the Federal Housing Administration.

For more information about how this may apply to you, speak with a lender, accountant or attorney.

Need help buying a home?

State and local housing authorities often have programs to help homebuyers research and purchase a home. Programs can include counseling, down payment assistance, and more.

Neighborhood Stabilization Program (NSP)
Currently, some local housing authorities and housing non-profits have programs for homebuyers that use HUD's Neighborhood Stabilization Program funds.

Fannie Mae supports NSP and offers some concessions to streamline the purchase of Fannie Mae properties for buyers using NSP funds. This includes:

•· Deposit Waivers - Fannie Mae will waive the earnest money/deposit requirement for public entities using public funds to purchase a Fannie Mae-owned property. Individual homebuyers using public funds to purchase a Fannie Mae-owned property do not have to meet the full 5% earnest money/deposit requirement. Deposits can be as low as $500.

•· Reserved Contract Period - Upon receipt of an acceptable offer, buyers have the ability to renegotiate their offer after obtaining an NSP-required appraisal.

•· Extra Time for Closing - Buyer receives up to 45 days to close, 15 days more than is usually permitted for purchases of Fannie Mae-owned properties.

For more information on NSP programs in your area, click here

First Look for Fannie Mae Homes

First Look is designed to provide owner occupants and buyers using public funds a "first look" at Fannie Mae homes. Under First Look, Fannie Mae will only consider offers from owner occupants and buyers using public funds during the first 15 days a property is listed in the local multiple listing service (MLS). If the property is still for sale on the 16th day, investor offers may be submitted and will be considered. Ask a Fannie Mae listing broker for more information.