Investor · Detroit, MI · Member since 2008 · 296 posts · 11 votes
Hello everyone.
I have a few quick questions about the first time home buyers tax credit. I am a college student looking for a place to live permanently until I finish up my last few years of college. Since the tax credit looks to be expiring in November, I was wondering if I am eligible for it? I am a single student with a small income, however I figured that I could buy a foreclosed home for under $5000 and keep the other $3000 for small repairs on the home and furniture. Do you think this would be a good idea? Do you have to qualify for a loan if the total purchase price of the home is less than the tax credit? Are college students even eligible being that most of us have little to no credit established? Please get back to me ASAP I would really like to take advantage of this opportunity...
Real Estate Investor · Amarillo, TX · Member since 2008 · 547 posts · 214 votes
17y
anyone who has not owned a primary residence in the last 3 years is eligible. Although as stated above its says 10% of the purchase price up to $8000. so a $5000 house you would recieve $500. As it sits right now the property must close by end of november.
-Scott
Real Estate Investor · Panama City Beach, FL · Member since 2009 · 75 posts · 4 votes
17y
While we are on this subject I have a question. How long does it take to get the tax credit after filing? Does anyone had experience with that? I sold a house in first week of June and the buyer still have not gotten the money although they filed immediately after closing with an amended 2008 tax return.
Tiara, if you can buy a house close to your college for $5,000, just do it.
Unless your credit is totally trashed, and I mean beyond ghastly, you can get a credit card that will give you $5,000.
Use whatever you are using to pay your rent now, and rent out a room to a roommate, and use those funds to make the payments on the credit card.
I don't mean this as an insult, because you strike me as an outside-the-box thinker, and smart. But sometimes college students don't know as much as they should about finances:
Go to several banks and inquire what their credit card terms are. Don't just sign up for the first card offered to you. Interest rates on credit cards can vary between 6% and 33%. The interest rate greatly affects your payment, and in the end, how much you've paid for the house.
Never ever be late on a CC payment. Set it up so an automatic payment is taken out of your savings or checking, so your payment can't get lost in the mail.
Then, every month, make extra payments against the credit card balance. Minimum payment barely covers the interest and if you pay the minimum, you will never get it paid off.
Real Estate Investor · ten mile, TN · Member since 2009 · 1k+ posts · 374 votes
17y
Originally posted by Anna Estes:
While we are on this subject I have a question. How long does it take to get the tax credit after filing? Does anyone had experience with that? I sold a house in first week of June and the buyer still have not gotten the money although they filed immediately after closing with an amended 2008 tax return.
Anna, if she just bought it in june 2009 then it would have to be applied for on her 2009 tax return. An amended return for 2008 will not do it because she did not own it in 2008. There will be no monies comming her way for the credit under the scenario given here.
Real Estate Investor · Dayton, OH · Member since 2010 · 21 posts · 1 vote
16y
Ok, I have a question with a scenario.
I'm military and bought my home in 2006 with my VA loan. I moved from the home in 2009 to go overseas. I will be back this year, and probably buying next year before the tax credit runs out. When I buy again, (if possible) I will use my wife's VA loan. My question is... Although this isn't the "first" house we have bought, will we still qualify for the tax credit? BTW, we still own the house purchased in '06, but we rent it out.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
16y
Then, no, you cant' qualify as a first time home buyer. See the NAHB FAQ
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, IRS Notice 2009-12 allows unmarried joint purchasers to 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.
Since you owned a principal residence in 2009, you would not qualify until three years later, sometime in 2012. The deadline is April 30, 2011 for you to get a home under contract.
Unfortunately, you don't qualify for the move up credit of $6500 either. That requires you to have lived in the residence for five of the last eight years. Sounds like you only lived there for (about) three years.