6500 tax credit and 8,000 tax credit

Another provision in the bill creates a new $6500 tax credit for purchasers of new or existing homes who have already owned a home for at least five years. Any purchaser who sells the home or ceases to use it as a primary residence within three years of purchase must repay the credit.
Since its inception as part of the stimulus package passed in February, more than 1.4 million Americans have taken advantage of the new homebuyer tax credit, at a cost to the treasury of about $10 billion, according to the Treasury Department. The National Association of Realtors estimates that 350,000 of these buyers would not have purchased their homes without the credit, which was set to expire on Nov. 30. The new law extends the credit to April 30 of next year; those who sign agreements of sale by that date will receive the credit if the sale closes by June 30.


A tax credit of up to $8,000 is available for qualified first time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.

Must purchase a home(close and receive title) on or after January 1, 2009 and before December 1, 2009. Must be first-time home buyer, which means you cannot have owned a home-and used it as your primary residence- for the past three years prior to purchase. The home you purchase must be used as a primary residence. The home cannot be used a vacation home or rental property. You cannot purchase a home from a close relative such as your spouse, parent, grandparent or grandchild. You must make less than $75,000 for a Single taxpayer or less than $150,000, if filing joint

About the $8,000 tax credit

Use as a downpayment or closing costs. Intially, the tax credit on buyers' tax return next year-- either up to $8,000 or 10%-- whichever came first. Now, a new HUD initiative allows qualifying firt-time home buyers to receive these funds up front to be used as a down payment or money towards closing, as announced by U.S. Housing and Urban Development Secretary Shawn Donovan. This has been referred to as a Bridge Loan.

FHA- aproved lenders, only-- at this time, only the Federal Housing Administration (FHA) has issued guidance regarding the monetization of the first-time home buyer tax credit. Home buyers using FHA- approved lenders can apply the tax credit to their down payment. Home buyers must pay the 3.5 percent-- While the $8,000 tax credit can be used for the down payment of closing costs, home buyers must still come up with the FHA's required 3.5% down payment on their own.