Newly Enacted Legislation Provides Tax Credit for First Time Homebuyers

Many know that the recently enacted Housing and Economic Recovery Act of 2008 offers relief for some homeowners facing foreclosure, but did you know that the Act provides an excellent opportunity for first time homeowners as well?

The Act provides a $7,500.00 tax credit for First Time Homebuyers on an eligible home purchase. Congress’s intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales.

The credit is repayable over 15 years or when the home is sold, if there is sufficient capital gain from the sale, making the credit similar to an interest free loan. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.

For more details on the credit, how it works and an example of the repayment process visit the following links:

Tax Credit Chart
Federal First Time Homebuyer Tax Credit Info Site