$7500 Tax Credit for First-Time Home Buyers
Designed to stimulate the housing market, the government is offering a $7500 tax credit for first-time buyers, the definition of which extends to those who have not owned a home for three years. A tax credit is not a deduction but rather a full credit added to the bottom line of your tax return! If you owe $1000, you can receive $6500. If you have a refund, add $7500 to it!
This credit is really a 0% interest loan that is repayable over 15 years, $500 per year. Still, it sure beats the terms of your average “12 months same as cash.” This is 180 months same as cash!”
While there are no real Zero Down Payment loans any more, I can think of at least one creative way to use this credit to buy a home. When using an FHA loan (3% down, 3.5% down starting in January), the down payment can be a “gift” from a family member. A parent, for instance, could provide the down payment, and the buyer could “make a gift” to the parent at tax time with the proceeds from the tax credit. Who do you know that could benefit from this limited time offer from the government? By the way, the credit is retroactive to any purchases made in 2008 so tell anyone you know.
