2008 First Time Homebuyer Tax Credit - Worth it?

[DanGarion]

Originally Posted by Flasch186

They probably couldve afforded to put 3% down for an FHA loan but the broker and the realtor encouraged them not to. It's not as easy as pointing the finger at just one group to say they caused this mess, I mean, shoot you could point your finger at the appraiser and say without his BS appraisal that loan wouldnt fly anyways, PLUS you have the followup lenders wanting to do HELOC's on the heels of the first mortgage so you immediately upon day of movein get a letter in the mail saying that for NO money out of pocket they'll give you $20,000 (the fees are rolled in).....

Personally I always think it's funny when people were asking me if I was doing FHA because I'd only have to put 3% down. Well that's great and all but I have to pay PMI, plus because I only put 3% down my monthly payment is significantly higher then if I put the customary 20% down. In our loan that would have been like a difference of around 500 bucks a month just on the larger loan amount, an then another 200 or so for the PMI.

[stevew]

Originally Posted by DanGarion

I was about to say show me a home that only needs 15k to cover the 20% down, and then I remembered not everyone lives in SoCal.

Paid 58K here. 3 bedrooms 1 bath. Full basement and deck. Place still needs work but its not like its a shanty.

[sterlingice]

Originally Posted by Flasch186

not entirely true. The brokers were pushing these loans on people late to the party who in many cases didnt qualify under normal DTI's so they would qualify them on an adjusted DTI. Why? Because the brokers actually made more $ on the boutique loans than on the FHA loans at the time. The buyer didnt know which loan was better per se, they just knew their payment was lower and they couldnt believe that the home they were about to buy was the house of their dreams. They probably couldve afforded to put 3% down for an FHA loan but the broker and the realtor encouraged them not to. It's not as easy as pointing the finger at just one group to say they caused this mess, I mean, shoot you could point your finger at the appraiser and say without his BS appraisal that loan wouldnt fly anyways, PLUS you have the followup lenders wanting to do HELOC's on the heels of the first mortgage so you immediately upon day of movein get a letter in the mail saying that for NO money out of pocket they'll give you $20,000 (the fees are rolled in).....

you can point the fingers all over the place but it really ALL boiled down to MBS' and the house of cards that was built on top of it which is why I getg so pissed off when the banks refuse to work with anyone downstream. They created these exotic products and now they cant imagine why there are so many foreclosures and such, um, hello?! See that $300K rug in your company's foyer? there is your fucking answer.

So NO, I disagree with you. Youre pointing the finger at the last people at the trough. Im pointing it at the first group of people who got to the trough and said, "holy fuck, I know how we can glaze this trough in gold, and put little hoses off of it to reach everyone, AND we'll pay people to come drink from it." IMO, they are the creators of this mess but that's my $.02 and your opinion im sure will vary. I went back and underlined what you misapplied, IMO, or overlooked.

Fair enough. Glad for the clarificiation

SI

[kcchief19]

Originally Posted by Flasch186

please, the no money down was a small portion of the problem. It was the batting of the eyes at the credit score and the falsifying or steering of docs that was the biggest problem. The minimal DP was not the main issue although you'd think it was the way some people focus on the poor in this issue.

I disagree because there is no real single cause of the problem, it's a bunch of problems that collectively created a clusterfuck. The no-money-down loans were a problem. The reason HUD banned downpayment assisted loans (where essentially the seller gave you the money for the downpayment) was that they had a default rate of 30 percent -- one in three no-down loans defaulted. For conventional 30-year loans, the traditional rate is 1 percent or less. Even now, 30-year conventional loans only have about a 3 percent default rte.

Originally Posted by sterlingice

It was people who moved into $250-$750K grossly overvalued McMansions who put little down, some with the intent to stay, many with the intent to flip for a profit. But they took out stupid loans and got too much house. That's who created this mess.

Here I'm with Flasch. This was part of the problem, but not entirely. And like Flasch noted, a problem in markets like Florida, Las Vegas, California and even places like Ohio and Michigan is the prices plummeted 30% and these homes were underwater. So rather than continue paying on a home that won't be worth what they paid for another 10 years or more, they walked away.

Originally Posted by Flasch186

you can point the fingers all over the place but it really ALL boiled down to MBS' and the house of cards that was built on top of it which is why I getg so pissed off when the banks refuse to work with anyone downstream. They created these exotic products and now they cant imagine why there are so many foreclosures and such, um, hello?!

Again, I only disagree with the first part because there isn't a single cause. The banks are to blame for making irresponsible loans. Builders are to blame for building up too much inventory. Cities are too blame for trying to increase property tax revenues by jacking up home prices and making them unaffordable. Consumers are to blame for not understanding their loans.

FHA loans virtually disappeared during the boom because people were using these alternative loan products. Right now, pretty much every loan you see is either a conventional 30 with 20% down or FHA.

[JonInMiddleGA]

Originally Posted by kcchief19

Right now, pretty much every loan you see is either a conventional 30 with 20% down or FHA.

And if we had stayed there all along, along with requiring realistic credit requirements, are we even having this conversation?

I'd say that would have gone a long way toward avoiding the whole mess. Instead we fed the fantasy that everyone someone "deserves" a loan that's far beyond their means to pay, regardless of whether they had any history of paying their debts. And here we are.

I can't help but flash back to our last home purchase, with the lender virtually begging us to buy about half again as much house. Instead we had enough sense to know what was reasonable (at the time at least, it's not all that pleasant today) and we've managed to {gasp} actually pay our f'n mortgage, painful & difficult though it may be. And I'm sitting here feeling like a damned fool as I watch discussions of bailouts of people who didn't have enough sense to do the same thing and oh so looking forward to paying my next f'n tax bill to help finance it. I resent the hell out of it, I'm so f'n mad about it that I can barely keep a civil tongue (even by my standards) in my head about it, and there isn't one damned thing I can do about it. And people wonder why I haven't a shred of optimism left about much of anything?

edit to add: And while I'm at least starting to rant, I hear all this hue & cry about limiting the compensation of executives who take bailout money to save their mismanaged companies, can anybody point me to the limits being placed on the legion who are going to get themselves bailed out of their personal bad decisions? Or how much of their assets are going to be taken to help pay back the taxpayers?

[kcchief19]

Originally Posted by DanGarion

Just an FYI, I guess there are a couple different versions of the bill floating around one that says after the bill passes and another that says home sales after Dec. 31st 2008.

My bad: The final version as agreed to by the Senate is for one year after enactment. That was modified from the original version which covered after Dec. 31.

There was also a question earlier about what year you can take the credit. Yes, you can apply the credit to your 2008. You also have the choice of applying the credit in a single year or splitting between two years -- meaning you can get a $7,500 tax credit for two years or a $15k in one.

Another note -- it looking at amendment, there is language in there that suggests to me that the credit is not fully refundable. The original first-time buyer credit allowed you to obtain the entire credit. In essence, if your tax liability was only $5,000, you'd get that money back plus $2,500. Of course you had to repay which this you will not. However, there is line that reads to me that the credit is limited to your tax liability -- meaning you can't get back more than you pay in taxes. I think the splitting the credit over two years may be what a lot of us do. You need to make around $100,000 to have a $15,000 tax liability, and even then your AGI and any other credits may reduce your tax liability further. I'm guessing you would need an income more than $100,000 to take the entire credit in one year.

That's not set in stone. That's just my plain text reading of the amendment. But in all the documentation I've read over the last week, no one has use the phrase "fully refundable," so I think you will be limited to your tax liability.

The 4% mortgage buy down amendment was shot down and appears to be dead ... for now. There are groups pushing to trying and pass it separately but I'm not betting on that. However, the Treasury Department has been authorized to do this with money set aside for them, and apparently they have been considering it. However, forecasts say we should see 4.5% 30-year rates this spring. If the spread between 10-year Treasuries and mortgage rates were at their normal level, we'd already be there. My guess is that the Treasury Department will wait and see what the tax credit does and what mortgage rates do. The mere threat of the Treasury buydown might keep rates low, at least around 5%.

Looks like the housing tax credit survived the bipartisan agreement. The Dems agreed to cut some spending and tax cuts from the House version and add the Senate amendments.

There's some good stuff for people who don't buy a home too. The energy-efficiency tax credit has been improved so that you can get a credit of 30% up to $1,500 on such thing as energy-efficient windows, heating and cooling systems and certain other home improvements.

[kcchief19]

Originally Posted by JonInMiddleGA

And if we had stayed there all along, along with requiring realistic credit requirements, are we even having this conversation?

Tying in with something I said yesterday in the bailout thread, we would be having a different conversation but not necessarily a good conversation. The housing boom artificially boosted the economy between 2001 to 2005 when by all rights we should have had a more prolonged recession. If we had a recession five years ago, maybe this wouldn't have happened or wouldn't be as severe.

But the blame is the chicken or the egg -- was it the bad home loan or the investor who bought the bad home loan and leveraged it 30 times its value and then went belly up when Joe Sixpack defaulted?

In the housing industry, I'm in the minority as the guy opposed to no-money down or downpayment assistance programs. These were especially used for new homes where in essence the buyer would get a "charity" to donate or loan money to them for a downpayment. Of course, the "charity" received a donation from the seller for the amount of the downpayment. The default rate on this was alarming. To me, what good is it for a builder to sell a home in his neighborhood if there is a 1 in 3 chance that a year from now he's going to be competiting against that foreclosure?

[sterlingice]

That both complicated and cleared up one thing I was wondering. To pay $15K a year in taxes, you have to be making a pretty hefty income- for instance, filing jointly with $100K a year between the couple still doesn't get you to $15K. So, what happens to the money above and beyond $15K if you don't pay that in taxes per year?

Also, what is the aim of this credit? Is it to get people to buy houses? If so, why should this be retroactive to the beginning of the year? Those people already were going to buy a home.

SI

[Flasch186]

Originally Posted by JonInMiddleGA

And if we had stayed there all along, along with requiring realistic credit requirements, are we even having this conversation?

I'd say that would have gone a long way toward avoiding the whole mess. Instead we fed the fantasy that everyone someone "deserves" a loan that's far beyond their means to pay, regardless of whether they had any history of paying their debts. And here we are.

I can't help but flash back to our last home purchase, with the lender virtually begging us to buy about half again as much house. Instead we had enough sense to know what was reasonable (at the time at least, it's not all that pleasant today) and we've managed to {gasp} actually pay our f'n mortgage, painful & difficult though it may be. And I'm sitting here feeling like a damned fool as I watch discussions of bailouts of people who didn't have enough sense to do the same thing and oh so looking forward to paying my next f'n tax bill to help finance it. I resent the hell out of it, I'm so f'n mad about it that I can barely keep a civil tongue (even by my standards) in my head about it, and there isn't one damned thing I can do about it. And people wonder why I haven't a shred of optimism left about much of anything?

edit to add: And while I'm at least starting to rant, I hear all this hue & cry about limiting the compensation of executives who take bailout money to save their mismanaged companies, can anybody point me to the limits being placed on the legion who are going to get themselves bailed out of their personal bad decisions? Or how much of their assets are going to be taken to help pay back the taxpayers?

I remember harping on a certain state of the union address some time agoe wherein our POTUS told everyone to go out and own.....boy, how the world turns.

[JonInMiddleGA]

Originally Posted by Flasch186

I remember harping on a certain state of the union address some time agoe wherein our POTUS told everyone to go out and own.....boy, how the world turns.

{shrug} I thought that was foolhardy then, think it's foolhardy now. Right up there with let's get everybody to go to college.

Kind of in the same vein as me being bemused by the whole "spreading Democracy" p.r. campaign I guess.

[Galaril]

Originally Posted by kcchief19

My bad: The final version as agreed to by the Senate is for one year after enactment. That was modified from the original version which covered after Dec. 31.

There was also a question earlier about what year you can take the credit. Yes, you can apply the credit to your 2008. You also have the choice of applying the credit in a single year or splitting between two years -- meaning you can get a $7,500 tax credit for two years or a $15k in one.

Another note -- it looking at amendment, there is language in there that suggests to me that the credit is not fully refundable. The original first-time buyer credit allowed you to obtain the entire credit. In essence, if your tax liability was only $5,000, you'd get that money back plus $2,500. Of course you had to repay which this you will not. However, there is line that reads to me that the credit is limited to your tax liability -- meaning you can't get back more than you pay in taxes. I think the splitting the credit over two years may be what a lot of us do. You need to make around $100,000 to have a $15,000 tax liability, and even then your AGI and any other credits may reduce your tax liability further. I'm guessing you would need an income more than $100,000 to take the entire credit in one year.

That's not set in stone. That's just my plain text reading of the amendment. But in all the documentation I've read over the last week, no one has use the phrase "fully refundable," so I think you will be limited to your tax liability.

The 4% mortgage buy down amendment was shot down and appears to be dead ... for now. There are groups pushing to trying and pass it separately but I'm not betting on that. However, the Treasury Department has been authorized to do this with money set aside for them, and apparently they have been considering it. However, forecasts say we should see 4.5% 30-year rates this spring. If the spread between 10-year Treasuries and mortgage rates were at their normal level, we'd already be there. My guess is that the Treasury Department will wait and see what the tax credit does and what mortgage rates do. The mere threat of the Treasury buydown might keep rates low, at least around 5%.

Looks like the housing tax credit survived the bipartisan agreement. The Dems agreed to cut some spending and tax cuts from the House version and add the Senate amendments.

There's some good stuff for people who don't buy a home too. The energy-efficiency tax credit has been improved so that you can get a credit of 30% up to $1,500 on such thing as energy-efficient windows, heating and cooling systems and certain other home improvements.

So, I just filed my taxes on Tuesday and got the 7500 credit for our first home we ourchased back in June 08. So, this now mean we could of possibly got 15,000? Or could we cliam the other 7500 next year?

[DanGarion]

Originally Posted by Galaril

So, I just filed my taxes on Tuesday and got the 7500 credit for our first home we ourchased back in June 08. So, this now mean we could of possibly got 15,000? Or could we cliam the other 7500 next year?

With how I understand the bill as it is now, it's only going to be for those that buy after it's enacted.

So I guess we will just go for the 7500 0% loan.

[Mustang]

So much for the new $15K credit..

Looks like it was removed totally.

[Sublime 2]

The more I've read about the stimulus it appears the 15k credit has been chopped back. My hope is that they will just make the 7.5k credit non-repayable for everyone going back to the original law's date and extend it out to the end of 2009. We closed last week, so at the very least I'll be going with the 7.5k zero % loan.

[Mustang]

'Working to accommodate the new, lower overall limit of the bill, negotiators effectively wiped out a Senate-passed provision for a new $15,000 tax credit to defray the cost of buying a home, these officials said. The agreement would allow taxpayers to deduct the sales tax paid on new car purchases, but not the interest on loans for the same vehicles.'


hxxp://news.yahoo.com/s/ap/20090211/ap_on_go_co/congress_stimulus

[Flasch186]

kept it for cars but not homes? so dumb.

[SteveMax58]

The only part of this bill that I thought would be truly stimulative in the next few months gets removed. Ugh....

[Bigsmooth]

Wow. That is very disappointing....

[Sublime 2]

A $35 billion tax credit to support home sales was being jettisoned in favor of a more modest $2 billion to $3 billion proposal that would eliminate the repayment requirement in the existing $7,500 tax credit for first-time homebuyers.

Got this from a WSJ article. I would have missed out on the $15,000 proposal, so I'm very happy with the $7,500 non-repayable tax credit!!

[Flasch186]

most people didnt understand the difference and, from what Ive heard, this idea of $15K had a lot of potential buyers ready to buy....Im not sure the 7500 that's already been out there for a while will have the same effect (although it will have more than 0)

[SteveMax58]

Just as a side note...it would have been ridiculous to have not allowed those who qualified for the $7500/payback credit to also benefit from the $15k/no-payback credit.

It continues to perpetuate the notion of "wait on the sidelines because something better might happen later" mentality that the government seems to have perfected. No wonder the stock market is in shambles.

[DanGarion]

Originally Posted by Sublime 2

Got this from a WSJ article. I would have missed out on the $15,000 proposal, so I'm very happy with the $7,500 non-repayable tax credit!!

AWESOME! Free money!

[PilotMan]

Originally Posted by SteveMax58

Just as a side note...it would have been ridiculous to have not allowed those who qualified for the $7500/payback credit to also benefit from the $15k/no-payback credit.

It continues to perpetuate the notion of "wait on the sidelines because something better might happen later" mentality that the government seems to have perfected. No wonder the stock market is in shambles.

bingo

[JeeberD]

Originally Posted by Sublime 2

Got this from a WSJ article. I would have missed out on the $15,000 proposal, so I'm very happy with the $7,500 non-repayable tax credit!!

Outstanding news!

[Mike Lowe]

So I'm a bit confused...they nixed the $15,000 but I'm still eligible to get the $7,500 and it's not something that needs to be repayed?

My wife and I are closing between Feb 24th and Mar 2; supposed to find out by early next week.

Either way, we feel blessed!

[Sublime 2]

I've also now seen that the bill will increase the dollar amount to $8,000 from $7,500. But the dollar figure isn't set in stone I guess. I understand that we'll all be paying this (entire stimulus) back, but I'm just going to sit back on this one and take the "free" money for now and shut up.

[Bigsmooth]

Yep, looks like they are increasing to $8000 and extending the close date through August, 2009. I've also read that you cannot qualify for the entire 8 G's unless you are married. Singles only get 4000. What an Amehzing deal!

First-time buyers get $8,000 tax credit in stimulus bill | L.A. Land | Los Angeles Times

[kcchief19]

Originally Posted by Bigsmooth

Yep, looks like they are increasing to $8000 and extending the close date through August, 2009. I've also read that you cannot qualify for the entire 8 G's unless you are married. Singles only get 4000. What an Amehzing deal!

First-time buyers get $8,000 tax credit in stimulus bill | L.A. Land | Los Angeles Times

It will be $8,000 and cover homes purchased between January 1, 2009 and December 1, 2009 -- have no idea where Dec. 1 came from. There is nothing I have seen come my way that says anything about singles only getting $4,000 -- with the original credit, single buyers still got the full $7,500. I think someone has read that married couples filing separately can only claim $4,000 a piece and is confused.

Still only for first-time buyers (anyone who hasn't owned a home for three years -- if married, neither one of you could have owned a home during the last three years).

I don't think this will do anything. The $15,000 credit had people motivated and I don't think eliminating the payback will stimulate anything. Plus, it looks like the housing industry is going to push to still try and get the bigger credit in a separate bill later. That means we're going to have a lot of people continuing to wait on buying to see if the offer gets sweeter. In the end, the hype over the credit and not getting it is going to make things even worse for the market.

[JonInMiddleGA]

Meanwhile I just love the way the definition of the phrase "first-time" has been reworked.

Does that mean if someone goes without sex for three years their virginity is restored?

[SteveMax58]

Originally Posted by JonInMiddleGA

Meanwhile I just love the way the definition of the phrase "first-time" has been reworked.

Does that mean if someone goes without sex for three years their virginity is restored?

Wait until they start applying this logic to infidelity.

[JonInMiddleGA]

Originally Posted by SteveMax58

Wait until they start applying this logic to infidelity.

Heh, I can see it now. The Three-Year-Rule becomes to infidelity what the Ten-Second-Rule is to the feeding of small children.

[Chubby]

What if you are single and 1st time homer buyer, buy house, then get married?

[JonInMiddleGA]

Originally Posted by Chubby

What if you are single and 1st time homer buyer, buy house, then get married?

Then I believe the rule is you own roughly half a house, give or take half of your half.

[Raiders Army]

Originally Posted by JeeberD

Outstanding news!

I'm bummed actually since we bought last year. Always miss the good stuff...

[SteveMax58]

Originally Posted by Raiders Army

I'm bummed actually since we bought last year. Always miss the good stuff...

That'll teach ya to do something without waiting for the government to intervene.

[kcchief19]

Originally Posted by Chubby

What if you are single and 1st time homer buyer, buy house, then get married?

Interesting question. I may still have a sheet at work that actually explains such a scenario. My understanding is that if you are single and buy the home, the credit belongs to you. You can claim it on your taxes whether you file separately or jointly.

However, if your wife is not a first-time buyer, you could not claim the credit filing jointly -- you would have to file separately. If you are married, both buyers must be first-time buyers, not just one.

Definitely understand the eye-rolling at the definition of "first-time buyer." Even more reason to open it up to everyone IMHO.

[Chubby]

Originally Posted by kcchief19

Interesting question. I may still have a sheet at work that actually explains such a scenario. My understanding is that if you are single and buy the home, the credit belongs to you. You can claim it on your taxes whether you file separately or jointly.

However, if your wife is not a first-time buyer, you could not claim the credit filing jointly -- you would have to file separately. If you are married, both buyers must be first-time buyers, not just one.

Definitely understand the eye-rolling at the definition of "first-time buyer." Even more reason to open it up to everyone IMHO.

Basically she is 1st time buyer, I am not. We are not married (yet) but will be shortly since she's 4 months pregnant and for insurance purposes we are legally getting married beore the baby is born (then holding a traditional churchy wedding at some point after). I think if she buys and I cobuy she can get the credit but would have to file separate next year.

I'm pretty sure if we are married prepurchase we lose out on the credit as I don't qualify.

And I concur with the 1st time homeowner silliness involved. I've seen somewhere that they are no longer going to require repayment as well but not sure on that.

[PilotMan]

Originally Posted by JonInMiddleGA

Heh, I can see it now. The Three-Year-Rule becomes to infidelity what the Ten-Second-Rule is to the feeding of small children.

Whaddyamean feeding of small children? When was that stip put on?

[Chubby]

So this is all but law (passed both chambers, just needs Obama's sig).

If you close on a house after the bill is signed, which tax thing to you get: 08, new, your choice?

[Bigsmooth]

Oh baby. This turned out pretty sweet, not $15000 sweet, but $8000 isn't too shabby. It's "refundable" meaning that you get the full credit no matter your tax liability. Check out this chart that details the changes from the original $7500 deal:

hxxp://www.realtor.org/wps/wcm/connect/b32db1004d05f6338052c5fd73e5610f/government_affairs_tax_credit_chart_021308.pdf?MOD=AJPERES&CACHEID=b32db1004d05f6338052c5fd73e5610f

[JeeberD]

Crap...gotta pay back this year's version, though.

[DanGarion]

Originally Posted by JeeberD

Crap...gotta pay back this year's version, though.

What?

Oh nevermind you bought before 2009. We got lucky, ours was supposed to close before the 1st.

[Sublime 2]

Originally Posted by Bigsmooth

Oh baby. This turned out pretty sweet, not $15000 sweet, but $8000 isn't too shabby. It's "refundable" meaning that you get the full credit no matter your tax liability. Check out this chart that details the changes from the original $7500 deal:

hxxp://www.realtor.org/wps/wcm/connect/b32db1004d05f6338052c5fd73e5610f/government_affairs_tax_credit_chart_021308.pdf?MOD=AJPERES&CACHEID=b32db1004d05f6338052c5fd73e5610f

Also to add from the federalhousingtaxcredit.com FAQ.

#20
If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.

Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.

[Bigsmooth]

Let me run this by you all. I’ve been thinking about this a lot. Why couldn’t you amend your 2008 taxes to receive the $8000 before you close on a house? I don’t think they will ask for an actual closing date before issuing you the money if it is similar to the $7500 deal. They only ask for an estimated close date. So you could gamble that you will be closing by December 1, 2009, while using the $8000 as your down payment. Worst case scenario, you can’t close and have to give the money back? Makes sense to me.

[miked]

What if I bought my house in 2006

[Flasch186]

Originally Posted by Bigsmooth

Let me run this by you all. I’ve been thinking about this a lot. Why couldn’t you amend your 2008 taxes to receive the $8000 before you close on a house? I don’t think they will ask for an actual closing date before issuing you the money if it is similar to the $7500 deal. They only ask for an estimated close date. So you could gamble that you will be closing by December 1, 2009, while using the $8000 as your down payment. Worst case scenario, you can’t close and have to give the money back? Makes sense to me.

most lenders want to see where your down payment came from, "seasoning" vs. gift vs 401K etc. so I'd have to imagine that they will frown on the DP coming from the 'credit'. Do your own DD as I do not specialize in the financing end of the game.

[Chubby]

ok, we have an offer on our house I'm pretty sure we're going to take (going to make $1200 after realtor commissions which making any money on a house we've had for 2.5 years in this economy is a plus).

Has any of the people here more familiar than I run into my situation or know how it works? i.e. Girlfriend is 1st time home buyer (not married), I would be 2nd name on the morgatge. We would get married at some point after closing on the house. Can she still get the $8K by amending her 08 taxes (we would file separate next year both for the housing reason and the baby on the way)?

It seems like we should be fine but just looking for some confirmation as we want to make totally sure we are good to go before signing.

[Swaggs]

Originally Posted by Chubby

ok, we have an offer on our house I'm pretty sure we're going to take (going to make $1200 after realtor commissions which making any money on a house we've had for 2.5 years in this economy is a plus).

Has any of the people here more familiar than I run into my situation or know how it works? i.e. Girlfriend is 1st time home buyer (not married), I would be 2nd name on the morgatge. We would get married at some point after closing on the house. Can she still get the $8K by amending her 08 taxes (we would file separate next year both for the housing reason and the baby on the way)?

It seems like we should be fine but just looking for some confirmation as we want to make totally sure we are good to go before signing.

I would imagine that, as long as you are not on the title (to begin with) and/or you are not on the loan application (ie: her credit/income will be enough to get the new house w/o you), she would certainly be in line for the tax credit. I'm pretty sure you can put whoever you want on the title (regardless of the financing), so that shouldn't be a problem and it is something you can change down the road. If she cannot buy w/o your credit/income, I would think that it would be considered your second home and would nullify the tax credit for both of you.

[Chubby]

Originally Posted by Swaggs

I would imagine that, as long as you are not on the title (to begin with) and/or you are not on the loan application (ie: her credit/income will be enough to get the new house w/o you), she would certainly be in line for the tax credit. I'm pretty sure you can put whoever you want on the title (regardless of the financing), so that shouldn't be a problem and it is something you can change down the road. If she cannot buy w/o your credit/income, I would think that it would be considered your second home and would nullify the tax credit for both of you.

according to Federal Housing Tax Credit for First-Time Home Buyers: Frequently Asked Questions as long as we aren't married it's not an issue:

2. What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.

For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.