Tax Credit Expanded to Include Current Homeowners

There is great news for potential new homebuyers!  The very popular $8,000 first time homebuyer tax credit has been extended and expanded.  In addition to the $8,000 credit for first time homebuyers, the new legislation will allow qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years to be eligible for a $6,500 tax credit. 

In addition to expanding the tax credit to current homeowners, the legislation increases the income caps for eligibility.  Single taxpayers who earn up to $125,000 are eligible for the total credit amount, which is considerably higher than the previous income limit of $75,000.  Single taxpayers who earn up to $145,000 are eligible to receive a partial credit.  Married taxpayers filing a joint return who earn up to $225,000 are eligible for the total credit amount.  Those who earn more than this cap will receive partial credit up to $245,000.  

So what types of homes will qualify for the tax credit?  Any home that will be used as a principal residence.  This includes single family homes and townhomes.  The only requirement is that the home purchase price must be less than or equal to $800,000.   

When it comes to your new home purchase, the time is now!  To take advantage of the extended and expanded tax credit you must be under contract by April 30th, 2010 and close no later than June 30, 2010.

When you combine the historic low interest rates with competively priced homes and a tax credit for purchasing, you have a once in a lifetime opportunity to purchase your new home.  For more information on the tax credit visit FederalHousingTaxCredit.com.

Authored by Jeff Sickeler, Sales Manager for WFS Mortgage, LLC an Affiliate of Wells Fargo Home Mortgage