If I Buy A Foreclosure Can I qualify for the $8000 First-Time Homebuyer Tax Credit

The short answer is yes you can buy a foreclosure and take advantage of the $8000 First Time Homebuyer Tax Credit.  As long as you purchase this home as your primary residence.  The idea of the first time homebuyer tax credit is wonderful and almost unheard of.  The credit is all apart of Presidents Obama’s stimulus package that made headlines early 2009 right after he took office.  This first time homebuyer tax credit is meant to not only save homes from foreclosure but to stimulate the economy by allowing people to buy new homes with greater ease.

So, what does the $8000 first-time homebuyer tax credit do for you and how can you qualify for it if you purchase a foreclosure.

Well you won’t qualify for this credit if you already have a house as it’s only available to first-time homebuyers.  For this programs they define a first time homebuyer as someone buying a home for the VERY first time, or someone who hasn’t owned a home in over 3 years.

The programs is designed to be a credit not a loan.  Under most circumstances you will not have to repay this credit back unless you sell your home within three years of owning it.  In which case you there would be a $8000 penalty due to the government at closing when the property is sold.

This credit only applies to houses that are be used as a primary residences.  This stipulation is really important if you decide to purchase a foreclosure.   This means if you purchase a foreclosure you would have to live in it, it couldn’t be a property that you would be using as an investment property.

The first time homebuyer tax credit program was initially only available for homes that were purchased between January 1, 2009 and December 31, 2009, however it has been extended.  The new deadline is the home has to be under a binding purchase contract  by April 30, 2010 and that property must be closed by June 30, 2010.

There are income requirements for the tax credit.  If you are single you must earn less than $75,000.  If you are married you may earn up to $150,0000 a year as a couple to qualify.

There are a lot of honest people in the world but there are also people who will take advantage of a situation because they can, therefore you can’t get the credit if you’re buying the house from a relative.

So if you’ve found a foreclosure that you like and this is first home you plan to use it as your primary residence and you meet all the other eligibility requirements from above then yes you can use the first time homebuyer credit to purchase a home.

Talk with your real estate agent about your eligibility, and soon, you may be living in the home of your dreams, and best of all, you’ll own it!