The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to 10% of the purchase price or a maximum of $8000 for qualified, married buyers purchasing a residence after January 1, 2009 and before April 30, 2010. For singles, or Married, filing separately, the amount is $4000. This means you must settle on your new home BEFORE June 30, 2010.  You are eligible to claim the credit if you (or your spouse) have not owned a "principle residence three years prior to your purchase. 

The Tax Credit has also been EXPANDED to include existng homeowers.  You are eligible to claim the credit if you (or your spouse) have occupied your present home for 5 out of the last 8 years, you are also eligible to receive a $6500 Buyer Credit.  For singles or married, filing separately, the amount of the credit is $3250.

Income Limits for single taxpayers has been increased to $125,000 (which will qualify you for approx a $461,400 mortgage) and for married taxpayers filing a joint return is $225,000 (which will qualify you for a maximum priced home of $800,000. 

If your income exceeds these limits, there are some exceptions based on Modified Adjusted Gross Income where you may exceed these limits but still be eligible for a partial credit.

You can claim the credit if you already purchased a home and filed your Federal Income Taxes by filing an Amended 2008 tax return with a 1040X form.  You can also claim the credit when you file your 2009 returns.  You need to complete IRS Form 5405 and then claim the amount on Line 69 of your 1040 Return.

Recently, HUD ruled announced that the will allow "Monetization" of the tax credit.  This means that you don't have to purchase the home first and then apply for the credit.  Under the guidelines, HUD, non-profits and FHA approved lenders will be allowed to give home buyers short term loans of up to $8000.   Buyers will still need to satisfy the FHA 3.5% down payment requirements. 

For more detailed information you can contact Jerry Strusowski, Realtor at 302-234-7653.