For most Americans, the Federal First Time Home Buyer Credit expired last year on April 30th. However, when the program was created, Congress wanted to give deployed employees of the government and military a chance to use it. Members of the uniformed services, members of the Foreign Service and intelligence community employees that served at least 90 days of qualified, extended duty service outside of the United States between January 1, 2009 and April 30, 2010 would be granted a 12 month extension on the deadline.
If you qualify, you have to have an accepted purchase agreement by April 30, 2011 and you must close by June 30, 2011. You can receive up to $8000 for first time homebuyers and $6500 for previous homeowners.
The actual amount of the the tax credit will depend on the sales price of the home and your income. You can qualify for up to 10% of the sales price of your new home. So if your home is under $80,000, you will not receive the maximum credit. For example if you paid $70,000 for your home, the maximum credit would be $7,000.
Your income can also limit the amount of the credit. The maximum credit is for income up to $125,000 for single filers and $225,000 for joint filers. For those with higher incomes, the amount of the credit will be reduced 5% for every $1000 in additional income until the credit falls to $0.
There are some rules that affect whether you can qualify or not - for example if you buy from a relative (parent or child) you will not qualify, also if you are buying the home as a vacation or investment property, you will not qualify.
If you sell the home within 3 years, you will have to pay back the tax credit. If you buy this year and have already filed your income taxes, you can file an amended return to get the money now. Or you can wait and file your return next year and know that you will get a large tax credit!
If you served overseas in the last couple of years and were thinking about buying a home, now is that time!! Not only are interest rates very low, home prices are near the bottom and you can get a tax credit of up to $8000!!!
Leslie Vanderwerf, NMLS ID#335509, Advisors Mortgage - Email - Website