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The $7500 Downpayment Gift

Maybe you heard that Uncle Sam, who has been giving money Uncle Sam has a Check For YOU!out to just about EVERYBODY lately, has a check waiting for you... if you buy a house before next summer!

What is it?  How does it work?


This is a tax credit and not tax deduction.  It is a true dollar for dollar reduction on taxes owed.


The credit can result in a true tax refund!  If, for example, you were to get back zero on your 2008 taxes and you qualify for the full $7,500 credit, you would then receive a tax refund for $7,500.


The tax credit is essentially an interest-free loan.  You will repay the credit to the government $500 per year over 15 years or when the house is sold. 


If the profit you receive when selling your home is less than the remaining amount you owe, the discrepancy will be forgiven.  For example, if $5,000 was still owed and the sale of the home only generated $4,000 profit, then the remaining $1,000 shortfall would be forgiven and you would not have to repay the government. 

If you take the credit in 2008, the first $500 payment would need to be made when you
file your 2010 tax return.

To find out if you qualify for this $7500 - click here.Uncle Sam has a Check For YOU!

While you won't receive this check until you file your taxes... you might want to get a gift from a family member - and use that gift money to purchase a home, or to help with closing costs!  USDA and VA loans do not require downpayments - but there are costs involved with moving, and paying for homeowners insurance, and normally those costs will add up to 2 or 3% of the purchase. FHA guidelines change at the end of 2008, and the downpayment goes up to 3.5%!

If I was eligable for this Tax Credit, I think I'd get a gift, buy a house, and take advantage of the $7500 from Uncle Sam!

Comment balloon 9 commentsEleanor Thorne • November 07 2008 12:16PM

Comments

Don't forget, this program has a time limit too. Expedia (not .com) is called for.

Posted by Fred Chamberlin, Oak Harbor/Whidbeynulls, #1 Experienced FHA Mortgage Consultant (Guild Mortgage Co - Oak Harbor WA) over 10 years ago

i liek this one... re blogging it!

 

c the I

Posted by Chris Brown- Florida Home Loan Specialist | Certified Mortgage Planner, Chris Brown 407.367.2974 (Chris Brown | Certified Mortgage Planners) over 10 years ago

Wouldn't it just be better if they would hurry up and straighten out the banking mess?  Sure, these monies are nice, but, it is so difficult to get a loan through now that so many people are afraid to try to buy.  Never mind the falling prices.  Once a buyer tries to go for it, it can take months to get to the closing table.  So many new regs and rules.  My bankers here are so frustrated. Processors going back 180 days, instead of 60. So much of that new detail now.  Remember that $700 million?  Where is it or where did it really go?  Sorry, needed to rant:)

Posted by Frances C. Rokicki, Broker-Mentor,CRS (Fran Rokicki Realty, LLC) over 10 years ago

Fran!  Totally understand what you are saying... it's HARD to get a loan closed.  REALLY hard!

Posted by Eleanor Thorne, Equity Resources 919-649-5058 (Equity Resources) over 10 years ago

May want to re-word title. It is slightly misleading.  It is a good program, but hopefully people aren't banking on up to $7500 to use for a down payment. It is tiered, so the $7500 buyer would be buying a $750,000 home. If they are in need of $7500, then they may want to reconsider buying a place. I think it should be a tiered. For example, $5000 credit for everybody up to $500,000, and $7500 for all homes above that. 

Sorry this is in bold, getting a glitch.

Marty

Posted by Marty Woomer (Windermere Real Estate/WSI) over 10 years ago

Personally, I think this home buyer tax credit is a joke.

Congress takes away down-payment assistance and they hope that this tax credit will motivate buyers that are sitting on the fence - I don't think this is enough incentive.

But more importantly, they are puttingthe cart before the horse - this program assumes the buyer actually has a down payment...

Posted by Mark MacKenzie over 10 years ago

Mark and Marty - I understand what you're saying... but I think it's a good program.  As I look at the Economy - there are people in their 20s who should be buying property in my market.  We are still an APPRECIATING area, here in NC.  Because of the mayhem - they are reluctant to ask their parents, who just lost money in their 401K account, to give them the 3 to 4% for a purchase.  With this tax credit, they can get the gift for the downpayment, and if they choose to - they can pay that gift back when they file their taxes.  I think it's a good program, and I do not think the title is misleading if you read the post.

Posted by Eleanor Thorne, Equity Resources 919-649-5058 (Equity Resources) over 10 years ago

Eleanor, thanks for the reminder that this is out there.  The clock is ticking...

Posted by Jen Bowman, Realtor - Anna Maria Island & Bradenton FL (Keller Williams on the Water) over 10 years ago

I just received my check for $7500 3 weeks ago and used it for my 3.5% downpayment for FHA loan. I also rolled in my closing costs and didnt have to come out of pocket with any money. I also hear legislation is in the works to not have to pay back the $7500. Either way, it was a great opportunity to get out of renting.... Im in my new house!!!!!:)

Posted by dan about 10 years ago

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