$8000 First time Buyer and $6500 “Move-up-Buyer” Tax Credit.

Updated information on tax credit extension until June 30, 2010

It is now official – the first time buyer tax credit extension has been signed into law. The $8000 First Time HomeBuyer Tax Credit has been extended for buyers to secure an accepted purchase contract by April 30, 2010 and then close on that contract by June 30, 2010. The only change is that the income levels have been raised to $125k/year for singles and $225k/year for married and the maximum purchase is now $800k. They also added a $6500 tax credit for “move-up buyers” that have owned their current primary residence they are vacating for 5+ years and are buying a new primary residence. The same purchase dates and income levels apply to the “move-up buyer.” There will likely be a lot of “what if’s” for qualifying for the move-up buyer tax credit. The initial sanity check on the move-up buyer will be that their tax returns have shown their current primary residence address for the past 5 years. The tax credit is an IRS tax related issue so a buyer would likely want to consult a tax advisor with specific scenario questions on whether their situation would qualify. Loan underwriting guidelines still state that a move-up buyer needs to qualify with both mortgage payments unless the primary residence that the borrower is vacating has 25%/30% (FHA/Conventional) equity along with a rental contract and proof of security deposit.