We are all hearing that the tax credit for first time homebuyers and existing buyers is about to go away. Home purchasers must be under contract to buy the home by April 30, 2010 and closing must occur on or before June 30, 2010. Many people seem to know these details.

Here are some basics and some little known facts:
A buyer qualifies as a first time homebuyer if the purchaser or his/her spouse has now owned a residence during the 3 years prior to the purchase. The purchase must be a primary residence.

Homebuyers must be at least 18 years old on the date of purchase.

The tax credit cannot exceed 10 percent of the purchase price. Any home above $80,000 qualifies the buyer for the full credit; however, the purchase price cannot exceed $800,000.

Single buyers who earn no more than $125,000 and married couples with incomes up to $225,000 may get the maximum credit. The credit decreases for singles who earn between $125,000 and $145,000 and for married couples who earn between $225,000 and $245,000, but a credit may still be available.  Homebuyers who earn over $145,000 as singles and $245,000 as couples are NOT eligible.

Eligible current homeowners may claim up to $6500 as a credit. These buyers must have owned and lived in a home for at least 5 consecutive years of the last 8 years and meet the income requirements. What most people don't realize is that you do NOT have to sell your existing home to take advantage of the credit. HOWEVER, the newly purchased home MUST be your primary residence so the buyer must occupy the home. Some home buyers may be able to purchase without selling and keep their current property as a lease property or second home.

As long as you  live in your newly purchased home for at least 3 years before selling it, the credit does not have to be paid back. Military personnel do not have to repay the credit if they have to sell the home because of extended duty. Also, military personnel outside the US during any part of 2009 or early 2010 get an additional year to claim the credit. In other words, active-duty service people working overseas have until April 30, 2011, to execute a contract.

Finally, a buyer cannot purchase the home from a family member!

If you are ready to buy your first home or have been in your existing home for several years and are ready for a change, call The Hometown Team today and put us to "Work for You!" 713-253-7812