I must say that I am dumbfounded by the lack of interest concerning the first time homebuyer credit given by the government for up to $8,000. I do understand that the market is still unstable and prices continue to drop, but our particular portion of the country is not seeing any drastic swings, so I just don’t get it. I guess it could just be lack of knowledge, so I am going to provide everyone a sampling of questions I have received, which hopefully will help you with your decision making:

“Will I have to pay this back?”  The answer is NO. The prior program which allowed for a $7,500 credit was a no-interest loan that you paid back from your refund every year at $500 per year. This was also a gift basically, because each year your standard deduction and personal exemption go up about $500 per year for a couple married filing jointly.

“Do I have to have paid $8,000 in taxes to get the credit?”  Again, the answer is NO. The credit is for anyone, whether you paid Federal tax or not.

“What is the three year rule?” This rule disqualifies those homeowners who have been on title, either solely or jointly, in the prior three years from the date of your purchase. This includes ownership with a spouse or a home that you inherited.

“Do I have to wait until next year to get the credit?” The answer is NO. You can have your tax professional prepare an amendment to your 2008 tax return to claim the credit the same day you close on the home. This means you should have the check within 6 to 8 weeks.

“Does any home count?” The answer is YES. Any home that you purchase and plan to live in as your primary residence will allow you to receive the credit. For homes purchased with a sales price of under $80,000, you will receive 10% of the sales price. For example, if you buy a $60,000 home your maximum credit would be $6,000.

When do you think will be the next time you can get a gift from our Government for $8,000?

Bill Degar is a Branch Manager for Team USA Mortgage.  To contact your local TeamUSA/Homefront Capital representative and learn more about  mortgage options suited for you, please call 816-434-9810 and ask for Brynn-Marie or contact her via email at Kloster@homefrontcapital.com.