First Time Home Buyer Credit

Simply unbelievable! A first time home buyer credit could be yours even if you have previously owned a home. In fact, for limited periods, the United States government offers motivation in the form of thousands of dollars if you are buying a first home. But once the credits become available, don't dilly-dally. They never last forever.

However don't rule yourself out because you owned a house in the past. Sometimes there's even huge credits for repeat home buyers. *Guidelines can change without notice.

Just recently one of my Readers asked me for clarification...

Kate, I had a misconception about the notion of first time buyer programs. Can you point out first time home buyer tax credit features and define who qualifies.

Purpose of First Time Home Buyer Credit

From time to time, thousands of dollars are offered as a tax credit for buying a first home with the intention of breathing life into a struggling real estate market and lagging economy.

IRS Defines First Time Home Buyer

What is the IRS definition of a first time home buyer? The IRS defines first time home buyers as unmarried individuals or married couples with no current ownership in a personal residence for the previous three years. It goes on to state there are one or more exceptions and to consult a tax professional for clarification.

First Time Home Buyer Credit Highlights

Four recent highlights to the IRS first time home buyer credit.

  1. Limited to 10 percent of the sales price, up to $8000
  2. Applies to homes purchased during a specific period of time
  3. Allows single taxpayers to earn as much as $125,000
  4. Provides for married couple income limits of $225,000

First Time Home Buyer Programs

In addition, mortgage programs are occassionally created to benefit first time home buyers. For these purposes, someone buying a first home is defined by the specific organization responsible for offering the program, for example Fannie Mae or FHA.

FNMA for the First Time Home Buyer

What is the FNMA definition of a first time home buyer? Fannie Mae determines a first time home buyer as an individual buying a personal residence with no homeownership during the preceding three years.

For married couples, the homeownership history of both the home buyer and spouse is included. However, exceptions are made for displaced homemakers or single parents who had a joint ownership with a previous spouse.

Take a look at the HomePath financing, an excellent FNMA alternative to the IRS credit.

FHA for the First Time Home Buyer

What is the FHA definition of a first time home buyer? FHA defines a first time home buyer as anyone with no ownership in a principal residence during the previous three year period, including any individual who has only owned with a former spouse while married.

An owner of a mobile home not affixed to a permanent foundation is considered to be a first time home buyer. So are owners of property not in compliance with building code, not re-buildable for less than the cost of constructing a permanent structure.

More on FHA Loan Requirements right here on my website.

More on First Time Home Buyer Credits

Confused? It's okay and it's understandable. But don't let confusion over IRS, Fannie Mae or FHA guidelines stop you from buying a first home and receiving a tax credit when available.

First time home buyer credits can and will change.

Don't assume you make too much money to receive the first time home buyer credit. The IRS website states qualifying is calculated using adjusted gross income. Consult a tax professional for details.

So make the decision today to consult a tax professional and mortgage lender for clarification and assistance regarding the availability of the first time home buyer credit.

You Can Ask Kate Too

* The IRS, FNMA, and FHA can change their guidelines and programs. Always consult a real estate agent, lender, or CPA for up-to-date advice.

Or ask Kate about home buying.

You'll also find a wealth of information at Kate's Best Mortgage Rate Blog packed with the latest additions to this website, interest rate updates, and a fresh approach to affordable homeownership.

Unique Home Buying Help

Make your home buying a snap with the Home Buying Scorecard.

When traditional mortgage lending fails, look at Seller Financed vs Stated Income Mortgages.

Do you know this about Fixer Upper Houses? Toilets determine the age of a house and other tips.

Private Money Lenders because rural properties need special consideration.

USDA Rural Home Loans with zero down payment required.

Low Down Payment Mortgage - The dilemma of a low down payment.

Start your wealth building by buying a foreclosed home.

First Time Home Buyer Credit could be yours even if you have previously owned a home.

Learn the differences between Residential Construction Loans - Mortgages designed for building homes.

When private mortgage financing originates between family members, these questions arise.

Ask Kate About Home Buying - Go here to ask me a question.

How to Buy a House Questions and Answers II.

How to Buy a House Questions and Answers I.

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