As reported by Drew’s Mortgage New’s on November 6th, the first time home buyer tax credit has been extended through April 30, 2010. While there are some basic changes, everything is close to the same as it was before with one major exception. Current homeowners can take advantage of the credit as long as they have lived in their house for 5 years. Here are the two different buyer groups that can utilize this credit, as explained by Drew Sygit:

First-Time Homebuyers (FTHBs): First-time homebuyers (defined as not owning a home in the last 3 years) are eligible for up to 10% of the purchase price or a maximum of $8,000.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Current Owners: The new tax credit program now gives those who already own a residence incentive to move to a new home. If they’ve owned a primary residence for 5 consecutive years out of the last 8, their eligible for up to a $6,500 tax credit.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What this gives us is a tremendous opportunity to help first time home buyers buy our properties and utilize the tax credit. While you can’t use it as a down payment, it can be used for principal reduction of the mortgage when the buyer receives the tax credit. A couple of great resources for more information on this is the Renegade Detroit Investors post on Ways to Take Advantage of the Tax Credit Extension and an explanation of our First Time Home Buyer Program.

Post comments or contact us if you have any questions.

Jared Pomranky