Nearly 600,000 Home Buyers Have Claimed the Tax Credit So Far!

Nearly 600,000 Home Buyers
Have Claimed the Tax Credit So Far!

Don’t Miss Out- You Could be One of Them!

You may be eligible to receive this limited time tax credit being offered by the U.S. Federal Government.

John and Romy Kohler are first-time home owners, thanks in large part to the $8,000 federal tax credit enacted by Congress as part of the American Recovery and Reinvestment Act.

The credit "was extremely instrumental in us getting our home," says John, who is in management at Chick-fil-A in Bloomington, Ind., where Romy has enrolled in law school at Indiana University. "We couldn't have done it without that."

James and Jennifer Pelton of Lakeland, Fla., and Leslie and Enrique Talavera of Chula Vista, Calif., wouldn't have been able to buy their first homes without the credit, either. They, too, are among the tens of thousands of young families who are taking advantage of the government's latest effort to jump start the economy to become home owners.

The federal credit is available to first-timers who purchase a principal residence this year and close prior to Dec. 1. The credit is equal to 10% of the purchase price, up to a maximum of $8,000, subject to certain income limitations. And as long as you occupy the property as your main home for three years, it need not be paid back.

The Kohlers have been renters since they were married three years ago, and they were "looking to rent again" when they moved to Bloomington so Romy could attend IU. But when they learned that Congress had bumped the tax credit from $7,500 to $8,000 and dropped the requirement that it be paid back so long as they occupy the home as their primary residence for 36 months, they literally jumped at the opportunity.

The Kohlers put up a $6,000 downpayment and paid about $2,000 in closing costs. "But basically we'll get all that back in a few weeks when we receive our tax refund," John points out, "so we'll just about break even."

The Peltons in Florida aren't first-time buyers in the true sense of the term. But they still qualify under the tax credit rules, which define first-timers as anyone who hasn't owned a principal residence for three years prior to their closing date, the day they actually take title to their new home.

Now, though, they are owners of a $149,900, four-bedroom home at the Enclave, a Highland Homes community. And they are going to use the money they get back from Uncle Sam when they file their 2009 tax return as a cushion so they will never again fall behind on their mortgage payments.

In Southern California, meanwhile, the Talaveras have just moved into their four-bedroom, 2-1/2-bath house at the Summit at Eastlake.  Prices are more affordable then they've been in years and there are lots of models to choose from. But the tax credit was paramount, especially since California is kicking in a tax credit of its own for up to an extra $10,000.

"We are the classic people the government is trying to reach," says Leslie, who works in the business office at a local hospital while husband John is an E-6 in the Navy. "We were looking, though not very seriously because we thought the market might drop some more. But when we heard about the tax credit, we decided to take advantage of it."  Now, the family of four is living in a brand new home, a home "we never thought we'd be able to get."

On the federal level, where there is no limit on the total number of credits, nearly 600,000 have already claimed the first-time buyer credit.

As of March 6, nearly 568,000 had claimed a first-time home buyer credit, according to the Treasury Inspector General for Tax Administration, which audits the Internal Revenue Service.

Adapted from “Nearly 600,000 Home Buyers Claim Tax Credit So Far” by Lew Sichelman; Nation’s Builder News by the National Association of Home Builders 2008. For more information about the tax credit visit www.federalhousingtaxcredit.com.