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3825 Bedford Avenue
Suite 102
Nashville, TN 37215
P: (615) 327-4800
F: (615) 327-3248

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Congress approves up to $7,500 tax credit for first-time home buyers

The Housing and Economic Recovery Act of 2008*

Signed into law July 30, 2008, this landmark legislation allows up to a $7,500 interest-free refundable tax credit to first-time homebuyers for houses purchased between April 9, 2008 (yes, it’s retroactive!) and July 1, 2009.   
  • The amount of the tax credit = 10% of the home cost, not to exceed $7,500. So if the home costs $75,000 or more, the homeowner(s) will receive a tax credit of $7,500.
  • There are income limits. The full amount of credit is available for individuals with adjusted gross income of no more than $75,000 (or $50,000 on a joint return). The credit phases out above these income caps: $95,000 for individual filers and $170,000 for joint filers.
  • Eligible properties include any single family residence – detached home, condominium, townhouse, co-op – that will be used as a principal residence.
  • The purchaser (and his/her spouse) may not have owned a principal residence in the 3 years prior to purchase. [Translation: first-time really means he/she has not owned a principal residence in 3 years.]
  • The refundable tax credit essentially serves as an interest-free loan that is to be repaid over 15 years – 6.67% each year, interest-free, for 15 years. If the home is sold before 15 years, the remainder of the credit is recaptured on the sale.
  • People who don’t itemize their taxes may claim a property tax deduction of up to $500 for non-itemizing single filers and $1,000 for joint filers.
  • The law also includes a number of other housing provisions such as low-interest loans to first-time buyers.
Please pass the word to friends and family members who may qualify.  
 
This is absolutely the best deal we’ve seen in decades for first-time home buyers -- especially when combined with historically low mortgage rates and today’s reduced market prices (none of which will last forever).
 
Call us with your questions:
P: 615.300.8189
 
Richard Courtney
Stephanie Tipton Soper
Suzi Minor  
 
 
*Source: Details of the Housing and Economic Recovery Act of 2008 provided by the National Association of Realtors. For additional information, please visit:

NAR web site summary of bill provisions
NAR FAQ about the tax credit provisions