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Chanda Barrick REALTOR (Indianapolis, Avon, Greenwood)

8 Things You Should Know About the 2009/2010 Homebuyer Tax Credit Extension

8 Things You Should Know About the 2009/2010 Homebuyer Tax Credit Extension

What was originally considered a “First-Time Homebuyer” tax credit has been extended into 2010, so I thought I’d give you the key points you need to know regarding the new extension.

It’s Important to note, the key points in this post are applicable to transactions that take place AFTER November 7, 2009. If you closed on your home before this time, please see my other post regarding the 2009 Homebuyer Tax Credit.

This post will be updated accordingly when the revised form number 5405 has been made available on the IRS website.

  1. First and foremost, this credit no longer applies to just first-time homebuyers and/or those that haven’t owned a home in the last three years.  The credit now applies to existing homeowners as well. Here’s the breakdown of who qualifies for the credit:
    1. First-time homebuyer – If you’ve never purchased a home before you are a first-time homebuyer.
    2. Owned a home 3 or more years ago – If you held no ownership interest in a home for AT LEAST THREE YEARS PRIOR to the date you close on a home you plan to buy
    3. Existing homeowners – This category includes those individuals who have used their existing home as a principal residence for FIVE CONSECUTIVE YEARS during the last eight years. There are a few scenarios that apply here. If you’d like to run your situation past me, feel free to contact me to help you determine whether or not you qualify.
  2. The income caps have been raised.
    1. If you make $125,000 ($225,000 if married) or less you are eligible for the full amount either $8,000 or $6,500
    2. If you make between $125,001 and $145,000 ($225,001 to $245,000 if married) the credit amount is reduced
    3. If you make over $145,000 (over $245,000 if married) you are not eligible for the credit
  3. The amount available for the credit varies based on how you qualify:
    1. $8,000.00 - First-time homebuyers and those that haven’t owned a home within the last three years qualify for up to $8,000 based on the purchase price of the home.
      1. If you are married filing separate, the amount each of you can claim is 50% of what the transaction qualifies for (i.e. if the transaction qualifies for the full $8,000 credit, each of you may claim $4,000)
      2. If you purchased the home with others you can claim a certain percentage of the total amount received for the credit.  For example if two people purchased the home equally, the ownership interest would be 50%; three people 33%, etc...
    2. $6,500.00 – Existing homeowners qualify for up to $6,500 based on the purchase price of the home.
      1. If you are married filing separate, the amount each of you can claim is 50% of what the transaction qualifies for (i.e. if the transaction qualifies for the full $6,500 credit, each of you may claim $3,250)
      2. If you purchased the home with others you can claim a certain percentage of the total amount received for the credit.  For example if two people purchased the home equally, the ownership interest would be 50%; three people 33%, etc…
  4. The Date for this particular extension is April 30, 2010.  If you qualify for the credit and you have an accepted purchase agreement on or before April 30, 2010 you may claim the credit; however, the transaction MUST CLOSE ON OR BEFORE JUNE 30, 2010.
  5. Maximum purchase price for the home cannot exceed $800,000.
  6. You must attach the HUD/Proof of Purchase for the home to your amendment.  The 2009 tax credit did not require one to attach proof of purchase which sparked a slew of individuals taking advantage of the program. As a result, you must supply proof of purchase when you submit the claim for the credit.
  7. There is a possibility that you’ll have to pay back the credit
    1. If you sell the home you purchased within three years you may be required to repay the money you received. There are other possibilities, please see form number 5405’s instructions for further information regarding repayment requirements.
      1. It’s important to note, this may change based on the information provided in the revised form. I will update this post accordingly if this requirement change
  8. To claim the credit you’ll need to complete IRS form number 5405 and submit it with your 2010 or 2011 tax return.  In addition you can file an amendment to your return if you’d already completed a return before you purchased your new home.
    1. Again, it’s important to note that the current form number 5405 will be amended to reflect he new provisions of the tax credit. If you close on your home AFTER November 6, 2009, you will need to submit the revised form…DO NOT USE THE CURRENT 5405 FORM if you closed after this date. I will update this post to reflect the new form when it is made available.

Here are a few more posts you may find useful:

Buying a Home
8 Things to Consider When Buying a Home
Answers To: How Much Money Is Needed To Buy A Home?
How the HUD Bidding Process Works
Pre-Qualification vs. Pre-Approval, Which is better?

Selling Your Home
Should You Sell Your Home Before Buying a New One?

Foto Friday....Just Loungin' Around...

Earlier this week (or maybe it was over the weekend) I was out in the backyard when I noticed this little guy/gal was just lounging on a tree branch. It stayed there motionless for a while and I almost thought it was dead until I actually grabbed my camera and got a closer look, LOL.

Broad Ripple Village Real Estate Market Report, Indianapolis IN, October 2009 Data

Broad Ripple Village Real Estate Market Info

Following is the market report for the area known as Broad Ripple Village as of November 10th 2009.

Good news for October sales...They were up compared to September (8 sold), in addition to being up from October 2008 (10 sold) sales!

The extension of the Tax Credit for New Home Buyers (or those that haven't owned in 3 years) in addition to existing homeowners being able to receive a credit will hopefully keep the positive activity flowing.

Current Active Listings 70 Min Price: $112,900 Max Price: $525,000 15 Condo, 55 Single Family
Pending Listings 9 Min Price: $44,900 Max Price: $290,000 0 Condo, 9 Single Family
Sold in the month of August 13 Min Price: $95,000 Max Price: $252,000 3 Condo, 10 Single Family


Broad Ripple Village is bound by Kessler Boulevard East Drive on the south, North Meridian Street on the west, the White River on the north, and North Evanston Avenue on the east

Broad Ripple Village
is an area that is the perfect combination of old and new. Here you'll find homes built anywhere from the 1800's to current date. Broad Ripple has something for everyone with great restaurants, shopping, entertainment, and an emphasis on being active and healthy.

For more information on Broad Ripple and all that it has to offer, please visit the Broad Ripple Village Association home page.

Please feel free to contact me with any questions you may have about the area or if you'd like me to send you the current active listings in the area. I look forward to hearing from you!

Search homes currently on the market

How I Use My Blog To Help Clients, Potential Clients, and Readers In General...

Bob Stewart recently challenged us to write a post explaining how we've actually used our blog to enhance our relationships with our clients....For me, there is a specific post that immediately came to mind for this challenge.

Earlier this year, there was so much chatter about the tax credit, I felt compelled to write a post of my own regarding information I felt was important for people, in general, to know. I wanted my post to be informative so people that were first time homebuyers would understand it wasn't a simple matter of buy a house, get $8,000...

After writing the post, I didn't really do much with it as far as my clients go, until I had a "DUH" or "AHA" moment and realized "Hello Chanda, you should be sending this info to your first time homebuyers!" I began with a client that had just closed the purchase of her first home. I sent her a link to my post, in addition to the IRS link explaining how to amend a tax return. She was grateful for the information provided and I believe this along with making her experience as informative and easy-going as possible is a big part of why she sent me so many referrals.

I then decided I'd start using this post to help answer questions of those asking questions in various forums I participate in. Although they may not live in my area, I was able to provide them with information that was useful in helping to determine whether or not they qualify for the credit and where to go to get the form. Again, I've been the recipient of quite a few "Thank yous" since providing this information.

I recently worked with another first time homebuyer and after the transaction closed I sent her the link to my post explaining the credit and the link to amend her taxes. Again, another very happy client that has something to refer to when she has questions regarding this year's tax credit.

All in all, I think this was one of my best and most informative posts because it provides information I can pass on to my clients in addition to something for the rest of the first time buyers out there to reference as well.

To sum it all up, this isn't the only post I've used to provide information. When clients/potential clients ask about something I know I've written a post about or if they inform me that this is their first purchase there a few different posts that I send the links to. It gives them the ability to take the information in at their own pace and ask questions when they are ready.

Here are a few of the posts that my clients (and other homebuyers and sellers) may find useful:

Buying a Home
8 Things to Consider When Buying a Home
Answers To: How Much Money Is Needed To Buy A Home?
How the HUD Bidding Process Works
Pre-Qualification vs. Pre-Approval, Which is better?

Selling Your Home
Should You Sell Your Home Before Buying a New One?

Foto Friday...Tuesday Was Woodpecker Day...

I don't know what was going on Tuesday, but as I looked out the window I saw a HUGE bird on the side of my tree....I'd never noticed this type of bird around before so I went out to take a closer look...

As I got closer I realized this was the real life version of WOODY WOODPECKER, LOL! I couldn't get over how large he/she was! After looking it up, it appears this species is the Pileated Woodpecker... It flew from tree to tree pecking here and there, always just out of the way to get a good shot with my camera...

As I was trying to capture a good shot of "Woody", I noticed yet another woodpecker in another tree....Another species which appears to be the Red-bellied woodpecker... I've been here for four years and have to admit I've never seen either of these birds in my neck of the woods, it was a treat! I hope I can get a good shot of the Pileated some day.

Anyway, enjoy! I guess I got a bit wordy with my post, huh? :)

Pileated Woodpecker

Red-bellied Woodpecker