What does the American Recovery and Reinvestment Act mean for me?
The American Recovery and Reinvestment Act, passed this February, offers some much needed good news for home buyers. The most talked about provision of the bill includes a tax credit for first time home buyers (or consumers who haven’t owned a principal residence for the past three years). Qualified buyers who purchase a home between January 1, 2009 and December 1, 2009 may be able to subtract up to $8,000 from their 2009 federal income tax bill. Buyers will receive the full $8,000 credit as long as their joint income does not exceed $150,000 (or $75,000 for individuals).
To obtain the credit, buyers claim it on their tax return, which will reduce their income tax liability. (Any unused credit will be returned to the tax payer.) This great tax incentive applies to the purchase of both new and pre-existing homes, whether they are single family homes, townhouses, or condos. And buyers are not required to repay the tax credit unless they sell their home within three years.
Additional provisions of the bill benefit both new and existing homeowners. For example, the bill reinstates higher loan limits for FHA, Fannie Mae, and Freddie Mac that were first introduced in 2008, making loans more affordable for consumers no matter where they live.
Click here for more information on the benefits to home owners provided by the American Recovery and Reinvestment Act.