Will First-Time Homebuyers Use the $8,000 Tax Credit? Or Wait for …

Posted by: Carleton Sheets in Tax Credits, Incentive, Credit, Buyer on Jun 03, 2009.

First, there was last year's $7,500 credit to first-time homebuyers ... the problem was that it really wasn't a credit at all. It was considered a loan and had to be paid back.

This year's "up to $8,000 tax credit" to first-time homebuyers seemed to be an improvement on last year's credit because it didn't have to be paid back. The catch was that some potential homebuyers were excluded because they didn't have enough of a down payment---and couldn't use their tax credit until it was time to file.

So in order to qualify more buyers right away, the government decided that the "up to $8,000 tax credit" could be used as a down payment---but later opted to amend the credit again! 

The latest change allows first-time homebuyers to use the credit---if they have at least a 3.5% down payment. The reasoning is that using some of their own money makes it harder for homeowners to just "walk away." The credit from the government can then be used for closing costs, a larger down payment, or to buy down the interest rate.

I understand why the government changed the rules---I just wish they had "got it right" the first time!

Do you think homebuyers will take advantage of the "latest" credit that doesn't have to be paid back, or will they wait to see if more changes are coming?


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written by anthony maldonado, June 03, 2009
I am confused about this 8000.00 credit. Can I amend my 2008 taxes after I buy my first home and use the $8000.00 to pay my $4500.00
tax bill from 2008 and use the balance for home improvemnts. Please let me know I live and plan to buy in California.
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learn how to buy first home
written by Robert Williams, June 14, 2009
learn your system.
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Lookin to my first home too!
written by Sharon West, June 16, 2009
smilies/grin.gif Thank 4 all the information that is shared here. My question is Do you think this credit will thru out this year and be available next year?
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Trying to obtain finance for my first home as well!
written by Safiya Adams, June 18, 2009
I need help with this kind of thing i am relatively new to all this and could use some advise.
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written by Anastasia Tiedemann, July 01, 2009
Personal opinion: I'm not sure how long the program runs for, but I would bet that as long as the economy is in a rut and the government needs to provide a stimulus to spark large purchases that the credit will stay in existence. As far as some of the specific questions asked about claiming the credit, every person's situation is different and you should check with a licensed professional for the answer.
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