Tax Credit Extended

First-Time Home Buyer Tax Credit Extended For Qualified Service Members

Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.


# Qualified service member” means a member of the uniformed services of the U.S military, a member of the Foreign Service of the U.S., or an employee of the intelligence community.
# “Official extended duty” means any period of extended duty outside of the United States for at least 90 days during the period beginning after December 31, 2008 and ending before May 1, 2010.

For those who are qualified service members, you have an extra year to cash in on the credit. Your new deadline is April 30, 2011.

There has been another modification to the credit for members of the armed service that deals with the Tax Credit Recapture Rules. Currently, a buyer must repay the credit if they move out of their new home within three years. But you are exempt if the move is due to government ordered extended duty service.

To get the first-time home buyers credit, you will need to claim it on your federal income tax return. There is a specific form (IRS Form 5405) that helps you determine how much the credit will be. Consult a Real Estate Professional as well as a Tax Professional about the credit to ensure it is submitted correctly.

For those interested in the credit, visit FederalHousingTaxCredit.com to find out more information.

How does the $8000 Tax Credit work

Q. How does the $8000 tax credit work for First-Time Homebuyer?

A. This program does not require any repayment of the credit provided that the purchaser uses the property as their primary residence for a period of thirty-six months after their date of purchase.

Buyer will receive a credit of up to ten percent (10%) of the purchase price or a maximum of $8000.00 as a credit on your 2010 tax return, provided that your new home has a final sale price of $800,000 or less. This program went into effect on January 1, 2010 and is available to qualified buyers of their first new home provided that they have the property under purchase contract on or before April 30, 2010 and closed prior to June 30, 2010 to be able to qualify for the credit.

Buyer(s)cannot have an income greater than $75,000.00 as non-married purchaser or $150,000.00 for married purchases that file a joint tax return.

Q. When does the Tax Credit of 2009 run out?

A. First Time Homebyer Credit

Q. Can I file electronically?

A. No. Because of the documentation requirements for claiming the credit, taxpayers who claim the credit on their 2009 tax return must file a paper — not electronic — return and attach Form 5405

Real Estate listings in El Paso

Hi El Paso Home Buyers

So glad you found my site helpful. As a Buyer’s Agent, I invest a tremendous amount of time and money to provide these real estate tools and services for my clients. Please call to set up an appointment to meet.

If you are trying to take advantage of the First Time Home Buyer tax credit then time is of the essence. Because the process of buying a home can take 2-4 months on average, you are running out of time.

You may be wondering why the process takes so long. First, you need to pre-qualify because 99% of seller’s want a pre-qualification letter to make sure you have the ability to purchase their home. Call me for El Paso Mortgage companies with many years of experience in bond, FHA, and VA programs and will handle your application promptly.

Pre-qualification should take about 24-48 hours. Then you shop for your home, which can take from 2-4 weeks depending on your expectations. Once you have selected the right home, I proceed to negotiate a contract with the seller. Depending on the number of contingencies, the negotiation process can take a few days. Once the contract has been executed by both parties, you are going to schedule and pay for a termite and home inspection, which can take about a week. I always make my purchase agreements contingent on inspection. It is likely the home inspector my find some issues with the home depending on the age of the home. We then need to decide if you want to take the house as is or we need to ask for concessions from the seller. If the seller makes the requested repairs then that will take some time.

Your lender will require an appraisal which can take 3-7 days due to the changes in appraisal laws. Once the appraisal is done (hopefully at or above the price you offered) the loan goes to an underwriter for review which can take several days. Your lender will often require that you have PMI if you put down less than 20% on the home mortgage.

This is just a brief summary of what to expect in the process. I can provide more details at our meeting but in the meantime, you can read all about buying a home at Texas Real Estate.