We have put together informaton to assist you with your first home purchase.  Some of the information may be confusing.  If you need assistance one of our agents will be able guide you through the process.

First-Time Homebuyers Have Several

Options to Maximize New Tax Credit



IR-2009-27, March 18, 2009

Audio Files for Podcasts: English Spanish

WASHINGTON — As part of the Treasury Department’s consumer outreach effort and with the April 15 individual tax filing deadline approaching, the Internal Revenue Service today began a concerted effort to educate taxpayers about additional options at their disposal to claim the new $8,000 first-time homebuyer credit for 2009 home purchases. For people who recently purchased a home or are considering buying in the next few months, there are several different ways that they can get this tax credit even if they’ve already filed their tax return.

The Treasury Department encourages taxpayers to explore these options to maximize their credit and get their money back as fast as possible.

“The new credit can get money in the pockets of first-time homebuyers quickly,” said IRS Commissioner Doug Shulman. “For people who recently purchased a home or are considering buying in the next few months, there are several different ways that they can get this tax credit even if they’ve already filed their tax return.”

First-time homebuyers represent a significant portion of existing single-family home sales. The expansion in the first-time homebuyer credit will make it easier for first-time homebuyers to enter the housing market this year.

Under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchase a home before Dec. 1 receive up to $8,000, or $4,000 for married individuals filing separately. People can claim the credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.

The filing options to consider are:

  • File an extension. Taxpayers who haven’t yet filed their 2008 returns but are buying a home soon can request a six-month extension to October 15.  This step would be faster than waiting until next year to claim it on the 2009 tax return.  Even with an extension, taxpayers could still file electronically, receiving their refund in as few as 10 days with direct deposit.

  • File now, amend later. Taxpayers due a sizable refund for their 2008 tax return but who also are considering buying a house in the next few months can file their return now and claim the credit later.  Taxpayers would file their 2008 tax forms as usual, then follow up with an amended return later this year to claim the homebuyer credit.

  • Amend the 2008 tax return. Taxpayers buying a home in the near future who have already filed their 2008 tax return can consider filing an amended tax return. The amended tax return will allow them to claim the homebuyer credit on the 2008 return without waiting until next year to claim it on the 2009 return.

  • Claim the credit in 2009 rather than 2008. For some taxpayers, it may make more financial sense to wait and claim the homebuyer credit next year when they file the 2009 tax return rather than claiming it now on the 2008 tax return. This could benefit taxpayers who might qualify for a higher credit on the 2009 tax return. This could include people who have less income in 2009 than 2008 because of factors such as a job loss or drop in investment income.

The IRS reminds taxpayers the amount of the credit begins to phase out for taxpayers whose modified adjusted gross income is more than $75,000, or $150,000 for joint filers. Taxpayers can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately. provides more information, including guidance for people who bought their first homes in 2008. To learn more about the overall implementation of the Recovery Act, visit



1. Think about your credit. Poor credit will make you a much larger risk in lender eyes and a larger risk means higher interest rates and higher monthly mortgage costs. Make a point of paying your credit card payments, auto loans, rent, and other payments on time, all the time, and in full. In addition keep your credit card balances low below 30% of your available credit, otherwise banks may see high balances as a sign in weakness in managing your money.    


2. Consider additional property taxes.  Keep in mind that in addition to your mortgage payment you will have to pay taxes and insurance. Sometimes this is not included in your mortgage payment, so when you get your loan make sure it includes a escrow account for taxes and insruance.            


3. Know the real estate agents role.  Real estate agents are at the center of most property transactions. It's important for you to know what an agent does, who is represented, and how the system works. Typically a buyer does not pay anything to the agent and the seller pays all the buyers agent fees.  Realtors adhere to a strict Code of Ethics.         


4. Consider what location will work best for you.  Look at your needs, the needs of household members, and your preferences in terms of commuting, shopping, recreation, and other factors that are important to you.      


5. Plan on getting a home inspection as part of any offer you make.  A professional inspection can help you understand the condition of the property and the repair bills you are likely to face in the next few years.                 


6. Look into the financing process as soon as possible.  Get pre-approved by a lender so that you generally know how much you can borrow, what you can afford, and so owners will see you as a serious buyer.   


7. Save Money for a down payment.  You'll need money for a down payment, closing costs, moving, and other expenses. Put off trips, buying on credit, obtaining new debt and luxuries until after you're in your new home. 


8. Examine the different financial options which are open to you.  Consider FHA, VA, and state-backed loan programs which require little down and have liberal qualification standards.


9. Look for gifts and grants.  According to NAR, 22% of all first time buyers receive gifts from relatives and friends. Some companies offer grants and other incentives to employees who are buying a first home. Community groups may also have programs and financing in place for first-time buyers, while the federal government has established special programs for teachers and police officers                


10. Start now, don't wait!  Start taking steps now to get into a home. We currently are in a Buyers Market therefore the longer you wait the higher the home prices will be and harder it may be to get financed.


For assistance with your New Home Purchase, contact one of our agents!



Pam Bava
Real Living Realty
Ph: Mich: (586) 675-4653
Michigan and
Florida, MI  US
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