Back in July, we posted about the First-time Homebuyer Gets Tax Credit Relief that was signed into law by President Bush. This was great news for home buyers. Then, early in 2009, the new administration made the following adjustments.
| FEATURE | H.R. 3221 – Housing and Economic Recovery Act of 2008 | REVISED – Effective for Purchases on or after January 1, 2009 and Before December 1, 2009 |
|---|---|---|
| Amount of Credit | Ten percent of cost of home, not to exceed $7500 | Maximum credit amount increased to $8000 |
| Eligible Property | Any single-family residence (including condos, co-ops) that will be used as a principal residence. | No change |
| Refundable | Yes. Reduces income tax liability for the year of purchase. Claimed on tax return for that tax year. | No change |
| Income Limit | Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000, respectively). | No change |
| First-time Homebuyer Only | Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase. | No change |
| Revenue Bond Financing | No credit allowed if home financed with state/local bond funding. | Purchasers who utilize revenue bond financing can use credit. |
| Repayment | Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing. | No repayment for purchases on or after January 1, 2009 and before December 1, 2009 |
| Recapture | Yes. Portion (6.67 % of credit) to be repaid each year for 15 years. If home sold before 15 years, then remainder of credit recaptured on sale. | If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009. |
| Effective Date | Purchases on or after April 9, 2008 | All revisions are effective as of January 1, 2009 |
| Termination | July 1, 2009 | December 1, 2009 |
What was good was made even better! Now we learn that for home buyers here in Louisville KY, there are even more financial reasons to buy in 2009.
On April 22, 2009 Governor Steve Beshear announced a special initiative by the Kentucky Housing Corporation to offer up to 4,500 for down payment and closing costs for first-time home buyers who obtain a KHC home loan. The program will begin on May 1, 2009 and continue through Nov. 30, 2009.
For the full press release, follow this link: Governor Beshear announces help for first-time homebuyers
The Bottom Line: Don’t Miss This Opportunity
If you are currently renting or moving up in home price, you should without a doubt speak with a Realtor and Loan Specialist about your options. Interest rates are at historic lows and combined with the tax incentives from both the State and Federal governments, in all honesty, there may never be a better time to buy a home than 2009.
