On November 6, 2009, President Obama signed a bill into law that immediately extended the popular tax credit program offering up to $8,000 for qualified first-time homebuyers (FTHBs) into the first half of 2010.

The bill also instantly expanded the program, offering up to $6,500 in tax credits for qualified repeat home buyers, swinging open the door for even more qualified homebuyers to take advantage of this valuable opportunity at a time when mortgage rates are still near historical lows.

First-Time Buyers: For FTHBs (defined as someone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title), the basic rules remain the same, with one important exception – higher income limits are now in place, increasing the pool of potential buyers eligible for the tax credit of up to 10% of the purchase price or up to $8,000. This is money that does not have to be repaid as long you stay in your new home for at least 36 months.

Single tax filers who earn up to $125,000 are now eligible for the total credit amount. Those who earn more than this cap (but less than $145,000) can receive a partial credit. Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap (but less than $245,000) can receive a partial credit.

Repeat Buyers: The new homebuyer program offers an exciting new opportunity missing from the previous incentives – a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years. This gives those who already own a qualifying residence some additional reasons to take advantage of lower home prices and interest rates and finally move up to the home of their dreams.

Important Deadlines: Purchase agreements must be signed by April 30, 2010, and closings must be final by June 30.Get the FactsThere are other important rules and guidelines you must meet to qualify for this great opportunity. So, if you or someone you know has missed out on the first two home buyer tax credit programs in the last two years, don’t wait.

Article Courtesy of Homes and Money Quarterly News