$8,000 Tax Credit for First-Time Home Buyers!

What the bill says.............

H.R. 3221

Housing Assistance Tax Act of 2008

July 25, 2008

I. CURBING THE RISING COSTS OF OWNING A HOME

Additional standard deduction for real property taxes. The bill would provide home owners who claim the standard deduction with an additional standard deduction for State and local real property taxes. The maximum amount that may be claimed under this provision is $500 ($1,000 for joint filers). This proposal applies for tax year 2008.

This proposal is estimated to cost $1.537 billion over 10 years.

II. REDUCING EXCESS SUPPLY IN THE MARKET

Refundable first-time home buyer credit.

The bill would provide a refundable tax credit that is equivalent to an interest-free loan equal to 10 percent of the purchase of a home (up to $7,500) by first-time home buyers. The provision applies to homes purchased on or after April 9, 2008 and before July 1, 2009. Taxpayers receiving this tax credit would be required to repay any amount received under this provision back to the government over 15 years in equal installments. The credit begins to phase out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 in the case of a joint return).

This proposal is estimated to cost $4.853 billion over 10 years.

Temporary increase in mortgage revenue bonds.

Under current law, there is a national limit on the annual amount of tax-exempt housing bonds that each state may issue. Many states have reached their limit. The bill would increase this national limit for both small and large population states in 2008 to allow for the issuance of an additional $11 billion of tax-exempt bonds to provide loans to first-time home buyers and to finance the construction of low-income

rental housing. The bill would also temporarily allow qualified mortgage revenue bonds (a form of tax-exempt bond issued by states to help provide financing to first-time home buyers) to be used to refinance certain subprime loans.

This proposal is estimated to cost $1.475 billion over

10 years............click for complete copy of H.R. 3221

Some of the basic facts of H.R. 3221 are:

First-Time Home Buyer Tax Credit

• The tax credit is available for first-time home buyers only.
• The maximum credit amount is $7,500.
• The credit is available for homes purchased on or after April 9, 2008 and before
  July 1, 2009.
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
• The tax credit works like an interest-free loan and must be repaid over a 15-year period.

In order to qualify for an FHA housing loan, applicants must meet certain criteria, including employment, credit ratings and income levels. The specific requirements are:

• Steady employment history, at least two years with the same employer.
• Consistent or increasing income over the past two years
• Credit report should be in good standing with less than two thirty day late payments in the past two years
• Any bankruptcy on record must be at least two years old with good credit for the two consecutive years.
• Any foreclosure must be at least three years old
• Mortgage payment qualified for must be approximately thirty percent of your total monthly gross income
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