How does the new Stimulus Bill affect me?
This is a question that many home buyers in Grand Rapids, MI have been asking since the bill was recently signed into law by President Barak Obama earlier in the week.
Here are some of the most significant components in a nutshell:
1. Defining “First Time Home buyers”
You’re a first time home buyer if you have not owned a principle residence within the past three years. (The date of purchase is considered the day when your title is transferred). Folks who have a vacation home, but NOT a principle residence may technically still qualify. For an evaluation of your specific situation, you are advised to consult with a qualified loan professional.
2. It’s now Eight Grand….$8,000!
The number for the tax credit has bounced around a bit. The first tax credit passed last year under President Bush was for up to $7,500…but you had to PAY IT BACK within 15 years. Then the senate passed a bill which increased the provision to up to $15,000, but this had to be reconcilled with the house version which was considerably lower. The Final Compromise is capped at $8,000 which DOES NOT NEED TO BE REPAID. The credit is equivalent to 10 percent of the purchase price for your new home and only applies to first time home buyers who are purchasing principle residences.
3. Are there Income limits?
Yes, there are income limits. If you’re single, you only qualify if you make a modified adjusted gross income of $75,000 or less. This income limit increases to $150,000 if you’re married. You may be eligible for a reduced credit if your income exceeds these limits. Talk with a qualified loan originator to discuss you particular situation.
4. How long is this for?
A lot of you are wondering how long this credit will be for and if it is retroactive. This credit is only retroactive to the beginning of 2009 and will end at the beginning of December 2009. If you bought a home last year which qualified for the $7,500 tax credit, you will NOT be able to take advantage of this new provision. However if you purchased your home in January 2009 or the early part of February prior to the bills passage, you will.
5. Do I have to Pay Back the Money?
The credit offered to home buyers in the 2009 stimulus package does NOT need to be repaid. Also…because the tax credit is ‘refundable’ qualified buyers can take advantage of this credit even if they do not have much tax liability. Now…you must stay in your house for at least 3 YEARS to fully benefit from the credit. If you move before you’ve been in your home for 36 months, you will have to return the money to the government. There are however some exceptions in the event of a death or divorce.
If you’d like to compare the differences between the 2009 home buyer credit and the 2008 home buyer credit, contact us at firstname.lastname@example.org. We can send you a chart which details the differences in a clear, concise way.
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