Tax Credit for First Time Homebuyers

The Federal Housing Tax credit bill for first time homebuyers was enacted in July 2008. However, the stimulus package that was approved by congress and just recently signed by President Obama on Tuesday, February 17^th, includes some positive changes to the original first time buyers tax credit.

The maximum tax credit allowable by the July 2008 tax credit bill is $7,500 for homes purchased before April 9, 2008 and July 1, 2009. Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit. The tax credit works like an interest free loan and must be paid back over a 15-year period. The new tax credit included in the stimulus bill increases the tax credit to $8,000 and eliminates the repayment requirement if the home is not sold in three years. This new bill applies to first time homebuyers who purchase their homes between January 1, 2009 and December 1, 2009.

If you are a first time buyer, there are several things to consider before making that first home purchase. I found a couple of valuable resources on the internet that could be a tremendous source of information for you to consider before making that purchase. Look over these before entering into your home buying decision-making process.

Buying and Owning a Home Freddie Mac
Buying a Home Department of Housing and Urban Development

The Freddie Mac site, Buying and owning a Home is especially helpful and is chock-a-bloc full of valuable stuff. It is broken down into five main subjects and the first four subjects all deal with pertinent information that every first time buyer should read. FYI, Freddie Mac's legal name is the Federal Home Loan Mortgage Corporation. It was formed by Congress as the Federal Home Loan Mortgage Corporation, and immediately became widely known in the industry as "Freddie Mac," probably for the same reasons that people with lengthy names are often known by shorter nicknames (and similar to the common use of "Fannie Mae" to identify the Federal National Mortgage Association). Freddie Mac buys mortgages from lenders, packages the mortgages into securities and sells the securities guaranteed by Freddie Mac to investors. For the most part, the process is invisible to borrowers and renters. However, because Freddie Mac exists, millions of Americans have benefited from lower monthly mortgage payments and better access to home financing.

The first subject outlined in Buying and Owning a Home is Preparing for Home Ownership. It deals with the questions "is home ownership right for you" as well as "your credit and homeownership." The second subject is Purchasing and Owning a Home. It helps you hunt for the right home, make an offer and close on the home. It also teaches you how to protect the value of your home, manage the financial responsibility of homeownership and manage homeownership in the event of a disaster. The next subject deals with Calculator and Tools. It compares costs between renting and homeownership. It will help you calculate potential savings with homeownership and understand how much you can afford and how much you can borrow. It also compares the types of mortgages and estimates down payments and costs. The last subject that will be helpful to a first time buyer is called All About Mortgages. It will detail, "what is a mortgage", "how to select a mortgage", "how to work with lenders" and "how to apply for a mortgage". As you will find, this one resource will be a great tool to help you with your first home buying experience.

If you are seriously considering buying your first home, please take the time to check out some of the online websites that are listed in this article. Since buying your first home is one of the biggest purchasing decisions you will make, it pays to be informed. Take your time, find the right home for you, on the right piece of property, in the right neighborhood, and then look at your finances to make sure that this is the time for you to buy your first home. Good luck.