Buying a Home in 2009 Could Qualify You for the Federal Housing Tax Credit

Until now, there has probably never been a better time for one to purchase a home in the United States. Prices have reached record lows and the availability of all different types of home is higher than it has been in decades. And contrary to popular belief, there are plenty of lenders in the real estate market who are ready, willing, and able to provide potential clients with great deals on all types of mortgage loans. Perhaps the most significant reason to buy a home this year is the availability of the Federal Housing Tax Credit. This tax credit is a direct result of the American Recovery and Reinvestment Act of 2009 which was passed in the recent stimulus package.

The Federal Housing Tax Credit states that a homebuyer that purchase a home in the year 2009 can receive a tax credit of 10% (up to $8,000) of the purchase price of their home. This means that if you purchase a $50,000 home, you will be awarded a $5,000 tax credit for the year. If you purchase a home costing $80,000 or more, you will receive the full tax credit of $8,000.

There are certain requirements that one must meet in order to qualify for the federal tax credit. First of all, the home you purchase must be used for your primary residence. This tax credit does not apply to real estate investors looking to purchase a secondary residence for personal use or a profitable venture. Secondly, you must purchase your home between January 1, 2009 and December 1, 2009. That gives homebuyers a mere eleven months to buy a home and qualify for the federal tax credit. In addition, you need not be a first-time home buyer. Seasoned home buyers can qualify for the tax credit as well, so long as the home will be used as their primary residence.

If you’re worried whether or not your home will qualify for the tax credit, you don’t have to be. Any type of home that you plan to purchase to use as your principal residence will qualify you for the credit. This includes single-family homes, townhomes, and condos. Even houseboats will qualify for the tax credit so long as they are your primary residence. Regardless of the type of home you purchase this year, you can potentially receive up to $8,000 of tax credit.

A common concern that some people foresee in the tax credit is whether or not those who are building their own home will qualify. The answer to this concern is a resounding “Yes.” Those who have purchased a lot and are building a home to use for their personal residence will also qualify for the tax credit. Your home, whether bought or built this year, will be considered a purchase you have made for your primary residence. This means that you can feel free to shop around for your home or custom design and build your own—you’ll still qualify for the federal tax credit.