Today, I got a call from NPR about the $8,000 first time home buyer tax credit being offered by the federal government. So, given the love I have for my "peeps" here at AOL BV, and my passion for
African American wealth building, I thought I'd share some of this knowledge with the folks I love so much. The problem is that the government is still deciding if they want to extend the federal housing tax credit, but I certainly hope they do. For now,
the first time home buyer tax credit ends on November 30 of this year.
The federal housing tax credit is pretty straight forward: If you are buying a home for the first time and your income doesn't exceed a certain level, the government will flat out give you $8,000. This is better than when Oprah was giving away free cars on her show. So if you are thinking of taking advantage of it, please be prepared to act fast.
Here are some things you should know about the first time home buyer tax credit:
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Home Sales Up
A home with a reduced price is for sale in Carmel, Ind. neighborhood, Tuesday, Oct. 20, 2009. (AP Photo/Michael Conroy)
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NEW YORK - OCTOBER 16: Rapper Nas performs at a concert presented by Heineken Red Star Soul at Gotham Hall on October 16, 2009 in New York City. (Photo by Mike Coppola/Getty Images) *** Local Caption *** Nas
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NEW YORK - OCTOBER 16: Rapper Nas attends a concert presented by Heineken Red Star Soul at Gotham Hall on October 16, 2009 in New York City. (Photo by Mike Coppola/Getty Images) *** Local Caption *** Nas
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NEW YORK - OCTOBER 16: Rappers Ludacris (L) and Nas perform in a concert presented by Heineken Red Star Soul at Gotham Hall on October 16, 2009 in New York City. (Photo by Mike Coppola/Getty Images) *** Local Caption *** Ludacris;Nas
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Queen Latifah and Nas attend the Common & Friends Benefit Concert at the Hollywood Palladium on September 26, 2009 in Hollywood, California. Common & Friends Benefit Concert the Hollywood Palladium Hollywood, CA United States September 26, 2009 Photo by Johnny Nunez/WireImage.com To license this image (58499260), contact WireImage.com
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Queen Latifah and Nas attend the Common & Friends Benefit Concert at the Hollywood Palladium on September 26, 2009 in Hollywood, California. Common & Friends Benefit Concert the Hollywood Palladium Hollywood, CA United States September 26, 2009 Photo by Johnny Nunez/WireImage.com To license this image (58499263), contact WireImage.com
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LONDON - SEPTEMBER 25 : Nas performs at the Orange RocksCorps concert at the Royal Albert Hall on September 25, 2009 in London, England. (Photo by Samir Hussein/Getty Images) *** Local Caption *** Nas
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LONDON - SEPTEMBER 25: Nas performs at the Orange RocksCorps concert at the Royal Albert Hall on September 25, 2009 in London, England. (Photo by Samir Hussein/Getty Images) *** Local Caption *** Nas
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LONDON - SEPTEMBER 25: Nas performs at the Orange RocksCorps concert at the Royal Albert Hall on September 25, 2009 in London, England. (Photo by Samir Hussein/Getty Images) *** Local Caption *** Nas
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1) What is a first-time home buyer? If you have not had a principal residence for 3 years, then you are a first-timer. Even if you own a home that you are renting out, you still probably qualify.
2) If you are married, then both you and your spouse must be first time home buyers. If you buy a home with another person you are not married to, then one of you must be a first-timer, and only one of you gets the tax credit.
3) "Blinged out" folks need not apply. The tax credit starts phasing out if you earn between $75k and $95K per year. If you earn over $95K, you need to find your own tax credit, because Barack's not giving you anything.
4) This is a refundable tax credit. That distinction is important, because it means that if you only owe the government, say, $1,000 in taxes, they will simply send you a check for the other $7,000 ($8,000 minus $1,000). Some tax credits are not refundable, so this one is especially worthwhile.
When it comes to the $8,000 first time home buyer tax credit, the bottom line is this: Jump on it now. Owning a home is one of the first steps toward building wealth. Before buying a home, read a book or two on home buying, so you can understand financing, credit scores, inspections, insurance and closing costs. It will be a great educational experience and something fun for you and your partner (if you are in a relationship). The government is not usually this generous, so this is your opportunity. You should take advantage while you can, especially if the federal housing tax credit is extended past the November 30, 2009 deadline.
Dr. Boyce Watkins is a Finance Professor at Syracuse University and a leading Black Speaker. To have Dr. Boyce commentary delivered to your email, please click here. 
Comments: (5)
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By: LadyJNewYork on 10/26/2009 1:59PM
The refund you'll get for first time homebuyers from the government is 10% of the purchase price of the home, or up to $8,000 if price of home exceeds $80,000. You go to the IRS and have your taxes amended and they will send you a check (if you owe IRS or student loans that money will be deducted less your refund).
And you will only qualify if you are a "FIRST TIME Homebuyer". Meaning you have never owned a home before.
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By: Toni Clark on 10/26/2009 2:14PM
However, we also found out that one can qualify as a 'First Time Homebuyer' if you haven't owned a home for the past three years. It gets a little tricky but here are the FAQs:
http://www.federalhousingtaxcredit.com/2009/faq.php
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By: azazelel on 10/28/2009 2:26PM
First time homebuyer means you haven't owned a primary residence for a period of three years. That's why the article says you may qualify even if you own a rental property. There is a recurring pattern with Obama, I would bet this credit is extended like the cash for clunkers. If it is I suggest anyone that "CAN AFFORD" and is ready to buy a home do it within the next 6 months. After that, the money problems in this country will eventually necessitate raising interest rates and that $8,000 won't make up for the increase in interest rates. Act now, act fast this is the time.
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By: Tee on 10/28/2009 8:37PM
Beware people that money has to be paid back. I close on my home last year 2008, I have to pay
500.00 ONCE A YEAR, until the 8000.00 is paid back. But what I think is this is not fair, people that purchase their homes in 2009, DONT.
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By: Sarah on 10/30/2009 1:45AM
I thought that everyone has to pay back $500.00 a year until it all is paid back. Whats the difference between 2008 and 2009? I purchased my house August 2007 and I think that I too should qualify.
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