How the New First-Time Buyer Tax Credit Works

How the New First-Time Buyer Tax Credit Works
Under the new housing bill, home buyers who have not owned a home in the last three years will be eligible for a tax credit equal to 10 percent of the property up to a maximum of $7,500. Here’s how it works:

* The credit is $3,750 for married couples filing separately. Unmarried people who jointly purchase a home will be able to divide the $7,500 credit.

* This program is actually a loan, which home buyers must repay over 15 years at zero percent interest beginning in the second year after they purchase the home. A home buyer who qualified for the whole credit would pay $500 for 15 years or about $41.67 per month.

* The credit applies only to homes purchased on or after April 9, 2008, and before July 1, 2009.

* High-income home buyers don’t qualify: Eligibility begins phasing out for single filers with adjusted income of more than $75,000 and $150,000 for joint filers. It completely phases out at $95,000 for singles and $170,000 for married couples filing jointly.

Important Facts About FHA

1. A Borrowner can obtain financing while still in a Chapter 13 bankruptsy
2. Utah Housing (through the FHA program) will finance up to 103% of a home's value. In other words, you can finance most of the time, everything, no down payment is needed, and even closing costs.
3. Sweat Equity is allowed for new construcion.
4. Screens on windows are no longer required.
5. Termite inspections are no longer required unless specified by the appraiser.
6. Non-occupant co-borrowers are allowed.
7. All money to close is allowed to come from a gift.
8. New, temporary loan amounts in Salt Lake County were increased to $729,750