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Congress Extends Existing Tax Credit, Creates New One

In early November 2009 Congress extended the $8,000 first-time homebuyer's tax credit and created a new tax credit for current homeowners.

The first-time homebuyer's tax credit is administered by the IRS and provides a refundable tax credit equal to 10% of the home's purchase price, up to $8,000.00 The tax credit for current homeowners is also administered by the IRS and provides a refundable tax credit equal to 10% of the home's purchase price, up to $6,500.00. If the credit exceeds the taxpayer's tax liability in either case, the taxpayer can receive a check for the difference.

Frequently Asked Questions

Who is eligible for the current homeowner's tax credit? The law defines a tax credit qualified homebuyer as a homeowner who has owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers, the law tests the homeownership history of both the homebuyer and his/her spouse. Repeat homebuyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit.

What is the definition of a first-time homebuyer? The law defines a first-time home buyer as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.

What type of homes qualify? Any home purchased which is used as a principal residence; no second or vacation homes. The home can be a manufactured or modular home and can be on your land or leased land.

Are there income limits? Yes. Modified adjusted gross income of up to $125,000 for a single or head of household buyer or $250,000 for joint tax filers.

If my income is above the limit, do I still qualify for credit? Possibly. A partial credit is available, subject to phase-out limits. Complete IRS Form 5405 to determine the size of your credit.

I heard the credit is refundable. What does that mean? Refundable means that it can be claimed even if the taxpayer has little or no federal income tax liability to offset. Should that be the case, the IRS will issue a check to the homebuyer for the difference between the tax due and the amount of the tax credit.

Is there a limit on who I can buy from?Yes. You cannot purchase a home from other family members, your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse or spouse's family members.

Does the tax credit have to be paid back to the government? Only if the home is sold within three years of receiving the credit.

For which tax year is the credit available?First-time homebuyers can claim the credit on the current year's tax return or the prior year's return. The credit is for 2008, 2009 and 2010 tax years for current homeowners.

How do you claim the credit? On line 69 of Form 1040, enter the amount of the credit as determined by filling out Form 5405.

Is there a deadline to get the credit? Yes. For first-time homebuyers, the home must be occupied by April 1, 2010 for new construction or purchased by that date with a closing before June 30, 2010. Current homeowners must have a signed purchase agreement by April 30, 2010 and close prior to June 30, 2010. For new construction, the eligibility date is based on the settlement date being before April 30, 2010.

Is a single section in a community eligible? Yes.

Where can I learn more?The National Association of Homebuliders website is http:///www.federalhousingtaxcredit/faq1.php for first-time homebuyers and http://www.federalhousingtaxcredit.com/faq2.php for current homeowners. The IRS website is www.irs.gov.

DISCLAIMER: The information provided here is not intended, and should not be construed, to be legal, tax or investment advice. Before taking any action you are strongly encouraged to, and should, consult with a qualified legal, tax and/or investment professional to whom you have provided all pertinent facts and information as to your individual situation. In addition, this flyer is intended for general information only and, as such, is provided with no guarantee as to its timeliness, completeness or accuracy. This information is based on a new federal law; laws can change at any time.

New FHA Title I Loan Limits Effective Immediately

Any current FHA Title I lender will be eligible to originate loans under the increased Title I loan limits. **Please note that the remaining changes to the Title I program, including underwriting guidelines and new insurance system, will become effective at a later date and will remain a top focus for MHI in the coming weeks.

MHI has strongly advocated for the loan limit increases and for expedited Title I implementation, as well as for lifting the moratorium on Ginnie Mae Title I issuers, to advance liquidity for manufactured home lending.

Thanks to all of our members and state association partners for their assistance in getting the loan limits increased as quickly as possible.Article courtesy of MHI

Moving A Manufactured Home?

Alabama State Law requires your mobile or manufactured home be moved and installed by a licensed, trained installer. This is for your safety, in order to ensure the correct installation.

The Alabama Manufactured Housing Commission trains and licenses certified installers. To see if your installer is licensed or for a list of installers, you can contact the AMHC at (334) 242-4036, or go to their website at www.amhc.state.al.us.

Owning your own home

It's the ultimate American dream. In fact, buying a home is probably the most important purchase you'll make in your lifetime.

As housing costs continue to climb, home ownership is simply beyond the financial reach of a growing number of Americans. Increasingly, the need for more affordable and efficient homes is being met by today's manufactured homes. Manufactured Housing offers all the qualities and amenities you want at a price you can afford.

If you have any additional questions or would like to see how beautifully manufactured homes can fit your lifestyle, find out more here about homeownership or visit a local Alabama Manufactured Housing Association retailer.