The new federal tax credit serves as an interest-free loan for first-time homebuyers or for those with no ownership interest for the last three years
The law defines first-time home buyers as those who have not owned a home used as their main residence for at least three years. The tax credit is for the purchase of either new or existing homes purchased between April 9 of this year and July 1, 2009.
The tax credit is a refund from Tio Sam. For example, if person owes $2,500 in income taxes, the $7,500 tax credit would wipe out that amount and the federal government also would send out a $5,000 check. If the taxpayer owes nothing at tax season, the total credit amount would be $7,500.
The $7,500 federal tax credit has a higher income ceiling for eligible home purchasers. Single buyers can get the full tax credit if their incomes are less than $75,000. Married couples will qualify with incomes up to $150,000. The tax credit phases out for higher-earning homebuyers and goes away entirely for single taxpayers earning more than $95,000 and married couples $170,000.
Homebuyers don't have to comply with any homeownership education in order to qualify for the tax credit, how ever, taking a class thru one of the locals homeownership counseling agency is highly recommended by RealEstateLatino.com before purchasing a home.