What is the First Time Home Buyers Act

Discover the first time home buyers act that can provide free money for those wanting to buy a home. Learn how you can benefit.

Buying a home is one of the biggest events of your life. When that time comes around for you to pick that one place that will be your piece of the pie,

This is a credit that is available to first time home buyers but it is only available for a short time frame. This was brought about with the Housing and Economic Recovery Act of 2008. This allows first time home buyers to either increase their tax refund or it will allow them to reduce their tax bill to pay less on their taxes. While this is for first time home buyers, you must qualify for this in order to take advantage of act.

So what is the first time home buyers act? This is basically an interest free loan from the government, allowing the first time home buyer to take a tax credit up to $7,500 on their tax return. It is important to remember that this is a loan from the government and you will need to pay back the loan over a 15 year period. This credit can be taken by using the claim form 5405 from the IRS. There are certain requirements that you need to meet in order to qualify for this loan.

The credit is 10% of the purchase price but will not exceed $7,500. This goes for single or married people. Your income can not exceed $75,000 if you are single and $150,000 if you are married. The loan must be repaid and is generally set up to be taken out with your taxes in one annual payment each year for 15 years. The payments start with the 2nd year of taxes after the loan is complete. You can expect to make a $500.00 payment at the beginning of each year.

If you were to die while you have this loan and you are married, your spouse will be responsible for repaying the remainder of the loan! But if you are single and you pass away, there will be nothing left of the loan to repay. If you sell the home within the 15 years after the loan, then the loan will become due in full with your return the first year after you have sold the home.

If you are a first time home buyer, you will want to learn about the first time home buyers act so that you can get the most out of the credit. Talk with your lender or the IRS to get more information. You will want to be educated on all there is to know about this act. You can use the money to help cover expenses such as a the down payment. The repayment plan is ideal as it allows you an interest free loan with 15 years to repay.

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