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First-time home buyers looking to purchase a home in Rhode Island, are eligible for up to 10% of the home’s purchase price, up to the maximum $8,000 tax credit just for buying a home.

The latest stimulus package signed by President Obama makes these credits available to first-time home buyers on homes purchased between January 1, 2010 and April 30, 2010.  

Purchases of homes priced below $800,000 are eligible for the tax credit and must be utilized as the borrower’s primary residence.  The home purchase must close on or before June 30, 2010.  You must be in a enforcable binding agreement by April 30, 2010.

Eligible properties include single-family detached homes, attached homes like townhouses and condominiums, manufactured homes.  You cannot purchase a home from a family member, a spouse or your spouse’s family.  

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Who is eligible for the $8,000 tax credit:

To qualify for the tax credit, the IRS defines first-time home buyers as anyone who has not owned a principle residence during the last three years prior to the purchase.

There are income limits to be eligible for the $8,000 tax credit. Single tax payers with income (AGI) up to $125,000 and married couples with income (AGI) up to $225,000 qualify for the full tax credit.

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Other provisions in the bill include:

• Requiring taxpayers to include documentation to prove that they purchased a home
• Requiring a minimum age of 18 to claim the credit
• Authorizing IRS to look at prior year returns and determine if a taxpayer is eligible for the credit
• Improving tax administration by increasing the number of electronic returns filed by return preparers

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Additional provisions for veterans within the bill include:

• Ensures service members will not have to repay the first-time home buyer credit if they are ordered to deploy to a different location and, as a result, forced to sell their home within three years; and
• Extends for one year, to April 31, 2011, the deadline for taking advantage the first-time homebuyer credit for qualifying service members, so that certain service members stationed overseas can take advantage of the credit when they return. 
• Ensures that certain payments under the Defense Housing Assistance Program (HAP) to assist military personnel selling a home that has declined in value are exempt from tax.

For more information about the tax credit  please visit http://federalhousingtaxcredit.com/2010.   If you have any additional questions, it is recommended that you consult a CPA or tax advisor.

If you would like to apply for a mortgage,       please visit my website at   http://www.guaranteedrate.com/lyndamckenzie or contact me at the number listed below.  I would be happy to help.  

Lynda Mckenzie
RI license#137627/NMLS#137627
Direct:  401-524-9796
E-mail: lmckenzie@guaranteedrate.com
Web:  http://www.guaranteedrate.com/lyndamckenzie
RI Licensed- 20102682LL