Slow Eddie

$7500 interest free loan from the Feds for first time buyers...

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If you closed on a home between April 2008 and July 2009 you can get a $7500 interest free loan from the government, as long as you haven't owned a home within the last three years. Its called a tax credit but in reality it has to be paid back over 15 years at $500 a year starting 2 years after you receive the credit (loan).

I'm always surpirsed at how many people are unaware of this little nugget of information. Although the web site was created by the Home Builders Association, the credit is legit. I've already filed for mine via Turbotax.

The tax form for the credit is Form 5405 from the IRS:

http://www.irs.gov/pub/irs-pdf/f5405.pdf

Here is the web site:

http://www.federalhousingtaxcredit.com/

The best part is that even if you closed in 2009 you can still get the credit back on this years (2008) return. I closed this month but will still receive my money in a few weeks.

Maybe this should be a sticky?

Eddie

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Actually it looks like it will be $15k :)

The key is it's a TAX CREDIT- not a loan- it reduces your tax liability- I would like someone to explain exactly what it means- If my take on it is correct- Suppose you make 200,000 a year and pay 17,000 in taxes- your tax liability is now 2,000. Suppose you make 55,000 a year and you pay 6,000 in taxes- your tax liability is now $0.00 - that doesn't mean you get the difference back (15,000-6,000= 9,000) as a refund. Is this assumption correct??? I'm truly not understanding this tax credit thing.

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I think if u owe $1 you get it all minus $1.

So if your taxes are $1 then you get a refund check for $14,999? I don't see how that can be. This year my refund was 4,000- if everything is equal do I get a 19,000 refund, if I buy a house?

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This is from an article I found today on AOL : If the provisions passed in the Senate survive the negotiations with the House, there could be a $15,000 tax credit for new home purchases. Since this provision is not targeted to first-time buyers, most of the people who take advantage of this will probably put a house up on the market and do little to reduce the inventory of homes already on the market to be sold.

This tax credit has nothing to do with the lower income folks. It's all about the person that can afford to buy anther property for profit.

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This is from an article I found today on AOL : If the provisions passed in the Senate survive the negotiations with the House, there could be a $15,000 tax credit for new home purchases. Since this provision is not targeted to first-time buyers, most of the people who take advantage of this will probably put a house up on the market and do little to reduce the inventory of homes already on the market to be sold.

This tax credit has nothing to do with the lower income folks. It's all about the person that can afford to buy anther property for profit.

Actually the $15k for everyone who bought a home was cut back to $8k for first time buyers only. Hopefully I qualify for this, since I closed on my house 1/12/09. Between my mortgage interest write offs and regular deductions an $8000 credit will effectively eliminate any of my tax liability for 2009. I paid $15k in federal taxes in 2008.

On another note, I got my $7500 on friday.

Eddie

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Fast Eddie you already got your money? That was quick! I am closing on my home in the next couple of weeks, and I wanted to get the $7500. I need it to put back into my home and pay off a small loan. I don't know whats up with the new bill, but I don't mind paying back $500 a year for 15 years. I wonder whats gonna happen now. I don't need a deduction, show me the money!!! Good luck with you new home and Congratulations!!!

:BigDance:

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You MAY not have to pay the $7500 back. But, it depends on the wording of the text of the stimulus bill. If the $8k credit is worded as being retroactively effective, then you may get the benefit of a bill that wasn't even drafted when you bought your home. If the bill is not retroactive, then your $7500 tax "loan" will be undisturbed. I'd like to be able to answer it, but it appears that no one in the media or Congress thought it important enough to discuss and allow constituents the time to read, critique, or contact their Congressperson. :evil::evil::evil: So, the question remains...

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See my post on the other thread. The details are obscure right now. How Congress feels its acceptable to mortgage our future on a bill that constituents and Congress cannot seem to read is beyond me. But it would be nice to have a discussion based on the text of the bill and not a patchwork of blogs and rumor mills.

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