The American Recovery and Reinvestment Act of 2009 authorize a tax credit of up to – $8,000.00 for qualified first time home buyers purchasing a residence on or after January 1, 2009 and before December 1, 2009.

This is true tax credit. The amount of the tax credit is determined by using 10% of the purchase price of the home, with $8,000. as a maximum. If you qualify for the full $8,000 tax credit and owe $2,000 on you currant taxes, you will receive a CHECK for $6,000 as refund for the tax return. What a great way to start. Many mortgages allow you reduce the principal and monthly payment one time. Talk to your mortgage banker and see if this is allowable under the loan regulations for which you are applying. By reducing your mortgage principal, you will then be reducing your monthly payment and increasing your equity in the home. All in the first year of ownership!

The definition of a first time home buyer is a buyer who has not owned a principal residence during the 3-year period prior to the purchase. That includes both husband and wife. Income limits are $75,000 for single taxpayers and $150,000 for married taxpayers filing jointly.

You can use this credit in 2009, or if you want to, and have already filed you 2008 taxes, you can file an amended return and have the credit faster. What a wonderful opportunity for a first time home buyer. The market would be flooded, if only people understood what a once in a lifetime opportunity this really is.

If you have any questions about any of the details of this program, e-mail or call me directly.