Buffalo, NY -- Thanks to legislation recently passed by the United States Congress and signed into law by President Barack Obama on Nov. 6, qualified first-time homebuyers and current homeowners have what is likely to be their best and final opportunity to receive substantial assistance with the purchase of a home according to Linda Mallia, President of HUNT Mortgage located in Buffalo, New York.

 

"The American Recovery and Reinvestment Act of 2009, offering an $8,000 credit for qualified first-time homebuyers, which was set to expire at the end of November, has now been both extended and expanded in scope," Mallia said.

 

Under the new Worker, Homeownership and Business Assistance Act of 2009, the Homebuyer Tax Credit will now be available for first-time homebuyers who sign a binding contract by April 30, 2010 and close on the purchase by June 30, 2010. The amount of tax credit for first-time homebuyers has been set at 10% of the purchase price, capped at $8,000.

 

In addition, the scope of act has been expanded to include up to $6,500 credit for current homeowners who purchase a new primary residence (credit amount for current homeowners has also been set at 10% of the purchase price, capped at $6,500). Under the terms of the legislation, "current" homeowners must have occupied their original/existing home as primary residence consecutively for five of the past eight years. Current homeowners do not need to sell their existing primary residence. They do, however, have to have a binding purchase contract on their new primary residence by April 30, 2010 and occupy it as a new primary residence by June 30, 2010. 

 

"The tax credit is a dollar for dollar benefit that the buyer does not have to pay back,” said Mallia. “It’s important to emphasize that it’s not a loan or a deduction; it literally is a dollar for dollar reduction in taxes owed. I encourage all buyers to check with their tax advisors about possible capital gains tax consequences.”

 

Other eligibility requirements apply, including income limits, but individuals who exceed the limit may be eligible for a partial credit, and buyers should seek advice from a professional tax advisor for specific tax calculations, according to Mallia. For a summary (in PDF format) of eligibility requirements for both first-time homebuyers and current homeowners, visit www.huntrealestate.com.

 

"This legislation will help stimulate a significant level of home buying activity in the market and, more importantly, it will have a terrific impact on our economy," Mallia concluded. "Given that many leading economists believe the U.S. economy is in the early stages of a recovery, I don’t foresee the tax credits being extended beyond April 30, 2010. I caution all potential buyers that this is likely to be their last opportunity to take advantage of this generous tax credit."

 

According to the National Association of Realtors (NAR), about 1.4 million first-time homebuyers have qualified for the tax credit through August of 2009; NAR estimates that 350,000 of these buyers would not have purchased their homes without the credit.

 

To find out more about the Worker, Homeownership and Business Assistance Act of 2009 temporary federal income tax credit and whether it may be available to you, contact your tax professional or legal advisor. To help you find your new home or to become prequalified for a loan, contact your local HUNT Real Estate ERA agent or a HUNT Mortgage Consultant by visiting www.huntrealestate.com.