I’ve had a number of Realtors and potential home buyers question me about the Government sponsored $7,500 tax credit for fist-time-homebuyers and I want to try to correct any misconceptions….The credit is not a product or program of any type of financing. It’s a tax credit.
It doesn’t matter whether a borrower finances a property purchase or pays cash.
When a buyer purchases a home as a first time home-buyer between now and June 30, 2009 they are possibly eligible to take a one-time tax credit on their Federal Income Tax Return to the maximum of $7,500 ($3,750 for a single buyer). For example after a buyer determines that he will get a refund of $1,500 on his tax return and he qualifies for the full $7,500 credit, he will now get a refund of $9,000 on next years tax return. Conversely if that same buyer owes $1500 in taxes and he qualifies for the full credit he would get a refund of $6,000 ($7,500-$1500 owed). Buyers will need to check with their tax prepares to determine eligibility. We have informed you about this program so that you can market this to first-time-homebuyers in the interest of helping you sell more homes. It is not a financing program of ours or any other lending institute. Again, it is strictly a government initiated program to allow first-time-buyers to be eligible for this credit on their tax returns. I have attached a chart from National Association of REALTORS that you may be of use to understand the credit and how it may be applied.