Friday, May 1, 2009

Nearly 600,000 have claimed first-time Federal Housing Tax credit

The National Association of Homebuilder's recently revealed that nearly 600,000 have claimed first-time Federal Housing Tax credit. An excerpt from the article:

John and Romy Kohler are first-time home owners, thanks in large part to the $8,000 federal tax credit enacted by Congress as part of the American Recovery and Reinvestment Act.

The credit "was extremely instrumental in us getting our home," says John, who is in management at Chick-fil-A in Bloomington, Ind., where Romy has enrolled in law school at Indiana University. "We couldn't have done it without that."

James and Jennifer Pelton of Lakeland, Fla., and Leslie and Enrique Talavera of Chula Vista, Calif., wouldn't have been able to buy their first homes without the credit, either. They, too, are among the tens of thousands of young families who are taking advantage of the government's latest effort to jump start the economy to become home owners.

The federal credit is available to first-timers who purchase a principal residence this year and close prior to Dec. 1. The credit is equal to 10% of the purchase price, up to a maximum of $8,000, subject to certain income limitations. And as long as you occupy the property as your main home for three years, it need not be paid back.

Consumers can find comprehensive information on the tax credit at

The Kohlers have been renters since they were married three years ago, and they were "looking to rent again" when they moved to Bloomington so Romy could attend IU. But when they learned that Congress had bumped the tax credit from $7,500 to $8,000 and dropped the requirement that it be paid back so long as they occupy the home as their primary residence for 36 months, they literally jumped at the opportunity.

The Kohlers put up a $6,000 downpayment and paid about $2,000 in closing costs. "But basically we'll get all that back in a few weeks when we receive our tax refund," John points out, "so we'll just about break even."

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