First Time Home Buyer Tax Credit

I received the $8000 tax credit and I signed a deed of trust March 1, 2010. I still have not gotten a home loan as of March 1, 2011. How long do I have to get a home loan?

=====ANSWER=====

Hello there Friend,

If I understand your question correctly, you signed a deed of trust during the purchase of a home without getting a mortgage over one year ago.

So I guess my question would be, who is holding the note on the property? Did you sign a land contract? Is the seller holding the note? Did you pay cash for the house?

A deed of trust involves three parties.

• The Trustor, which is you, the borrower
  
  
• The Trustee, which is an entity that holds "bare or legal" title
  
  
• The Beneficiary, which is the lender
  

So, if you got a tax credit for $8,000 then I would have to assume you deserved it and think you probably do not need to be concerned about a mortgage.

I took a look at IRS form 5405 which details who qualifies for the tax credit. I could not see anywhere that you had to get a mortgage.

My guess is a person could have paid cash for a house and even gotten the tax credit.

I'm not a tax expert so please check with the professionals, but the instructions say if you "entered into a binding contract" before May 1st 2010 you should qualify. A binding contract could be the purchase or land contract if I'm reading this correctly.

Anyway, I must urge you to see someone who knows tax law better than me if you have any concerns.

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Kind Regards,

Jeff Ragan

For additional information I have written on the tax credit feel free to visit these links below;

$8000 Tax Credit

First Time Home Buyer Tax Credit