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Understanding the US Housing Rescue Bill

The US Housing Rescue Bill: The Time to Buy is NOW!
With White House encouragement, Congress has just passed a bill that offers a temporary tax credit to first time home buyers, alters FHA loans, and in general prevents home foreclosures. How could this affect you?

Are you eligible?
Because of the new US Housing Rescue Bill, many first-time home buyers will be eligible for a tax break of 10% of the purchase price of their new home up to $7500. It must be repaid over 15 years with no interest, so essentially it is a short-term interest free loan. The credit is phased out for singles with an income over $75,000 and married couples with a combined income of $170,000 or more. The credit is available to qualified buyers who purchase their homes between April 9, 2008 and July 1, 2009.

How does the $7500 get to you? How do you pay it back?
This has nothing to do with your mortgage. The $7500 will be a tax credit on your 2008 tax return filed next year. Either it will lessen your taxes due by that much, or add to your tax return. Then it’s up to you what you do with it! It is then repaid in 15 equal annual payments of $500 beginning 2010 with no interest by adding $500 as additional tax when you file your income tax returns for those years. If you sell your house, the unpaid balance becomes due at the time of the sale.

Down Payment Assistance…going, going, not gone yet. Another provision of the legislation eliminates some down payment assistance programs (Ameridream, Genesis, etc.) later this year…but they are still available right now, and depending on your circumstances, we may be able to take advantage of them to double your benefit as a home buyer.

Add these benefits to low interest rates and reduced purchase prices, and there is no better time to buy than NOW!

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