By now you’ve probably heard of the First Time Home Buyer Plan and that it was due to expire back in November, but did you hear that it has now been extended and expanded?

That’s right, the $8,000 Home Buyer Credit that Uncle Sam was offering first time home buyers as part of “The Worker, Homeownership, and Business Assistance Act of 2009”, has now been extended. It was originally due to expire on Nov 30^th of 2009 but the House of Representatives in a vote of 403-12, approved the extension of the credit to April 30^th 2010. It’s also been expanded to current homeowners who now could receive up to $6,500 when replacing their primary residence or purchasing an additional home that they would use as a primary residence.

In addition to the extension and expansion of the homebuyer credit, the tax credit’s income limits were increased to allow more people to qualify and the documentation requirements have been tightened to help eliminate fraud. To make things even better, HUD is now allowing “monetization” of the tax credit. This means that HUD will be allowing buyers using FHA backed mortgages to apply their anticipated tax credit toward their home purchase in the form of a down payment and/or closing expenses.

Here’s how it all works:

For First Time Home Buyers who bought a home between January 1^st 2009 and April 1^st 2010, they will qualify for the full $8,000 tax credit. The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000. The home buyer tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase. To qualify for the first time home buyer tax credit, as defined by the IRS, you must meet the following criteria and follow these guide lines:

• You can’t have owned a principle residence during the three - year period prior to the purchase.
• The home you purchase must be used as a primary residence.
• You must be 18 or older and not claimed as a dependent by any other taxpayer
• You must buy a home or at least have a binding Purchase & Sale Contract in place by April 30, 2010 to qualify.
• The property you purchase cannot have been acquired from a relative.
• The home purchased must be less than or equal to $800,000.
• Buyers must continue to own the new home for at least three years. If they do not and decide to sell the home in less time, you will need to pay the credit back to the government.
• You must be under the income limit of $125,000 for single people and $225,000 for married people filing jointly to qualify for the full amount.
• Also, you must attach a copy of your settlement statement with your tax return to claim the credit.

For Current Home Owners looking to replace their primary residence who purchase after November 6, 2009 and on or before April 30, 2010 or purchased by June 30, 2010 with a binding sales contract signed by April 30, 2010, could qualify for up to $6,500 (up to $3,250 for a married individual filing separately). The home you purchase must become your principle residence but you don’t necessarily need to sell your current residence to qualify. This tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase. The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.

To qualify for the Move-Up/Repeat Home Buyer Tax Credit, as defined by the IRS, you must meet the following criteria and follow these guide lines:

• Current home owners must have lived in the same principle residence for any five consecutive year period during the eight-year period that ended on the date the replacement home is purchased.
• The home you purchase must be used as a primary residence.
• You must be 18 or older and not claimed as a dependent by any other taxpayer
• You must buy a home or at least have a binding Purchase & Sale Contract in place by April 30, 2010 to qualify.
• The property you purchase cannot have been acquired from a relative.
• The credit can only be claimed on primary residences purchased for less than $800,000
• This credit is limited to singles earning less than $125,000 and married couples earning less than $225,000. Don’t worry, profits from the sale of your personal residence won’t count as part of your income. Capital Gain Tax exclusions for principle residences allow taxpayers to exclude up to $250,000 per person or $500,000 per couple in profits on the sale of their personal residence from tax, if they lived in that home for at least two of the last five years. Only profits exceeding those excluded amounts would be included in income.
• Also, you must attach a copy of your settlement statement with your tax return to claim the credit.

So what are you waiting for??? Pick up that phone and call me right now at (603) 755-1229 and I'll help you take advantage of this great buying opportunity!