Mortgage Blog

Here are some important details about this tax credit.

1)Dollar-for-Dollar Benefit
The benefit of a tax credit is that it's a dollar-for-dollar
benefit, rather than a "tax deduction" or reduction in tax
liability that would only reduce $1,000 to $1,500 when all
was said and done.

So, if a first-time homebuyer who qualified for the entire
benefit were to owe $8,000 in income taxes and would qualify
for a tax credit of $8,000, she would owe nothing.

2)It's Refundable!
That means a homebuyer can receive a check for the credit
if he or she has little or no income tax liability.

For example, if a first-time homebuyer is eligible for a tax
credit of $8,000 but is liable for $4,000 in income tax,
she can still receive a check for the remaining $4,000!

3)What are the Income Caps?
Single tax filers with incomes up to $125,000 are eligible for
the total credit amount. Those who earn more than this cap can
receive a partial credit. However, single filers with incomes
of $145,000 and above are ineligible.

Joint filers with incomes up to $225,000 are eligible for the
total credit amount. Those who earn more than this cap can
receive a partial credit.
However, joint filers with incomes of $245,000 and above are
ineligible.

4)What's the Maximum Purchase Price?
Qualifying buyers may purchase a property with a maximum sales
price of $800,000.