The Saint Paul Blog

By Bud Kleppe

Well it's signed, and it's a much better Tax Credit this time around!

Here are the differences from the previous plan to the current one.

Feature	Tax Credit as created July 2008 applies to all qualified purchases on or after April 9, 2008	Revised Tax Credit Effective for purchases on or after January 1, 2009 and before December 1, 2009
Amount of Credit	Lesser 10% of cost of home or $7500	Maximum credit amount increased to $8000
Eligible Property	Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence	NO CHANGE
Refundable	Yes, Reduces (or can eliminate) income tax liability for the year of the purchase.  Any unused amount of tax credit refunded to purchaser.	NO CHANGE
Income Limit	Yes, Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return.)  Phases out above those caps ($95,000 and $170,000)	NO CHANGE
First-time homebuyer only	Yes, Purchaser (and purchaser's spouse) may not have owned a principal residence in 3 years previous to purchase	NO CHANGE
Revenue Bond Financing	No credit allowed if home financed with state/local bond financing	Purchaser who utilizes revenue bond financing can now use the credit
Repayment	Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing	No repayment for purchases on or after Jan 1, 2009 and before Dec 1, 2009
Recapture	If home sold before 15 year repayment period ends, then outstanding balance of repayment amount recaptured on sale	If home is sold within three years of purchase, entire amount of credit is recaptured on sale.  Applies only to home purchased in 2009
Termination	July 1, 2009	December 1, 2009
Effective Date	Purchases on or after April 9, 2008 and before January 1, 2009.  Repayment to begin for 2010 tax year	All revisions are effective as of January 1, 2009

If you want to get in touch with a loan officer to find out how this tax credit will effect you, drop us a line and I will get you in touch with Doreen Drake with PHH Mortgage.