The home purchase must be for a principle residence and it can include a boat, motor home or traditional house, condo or townhome up to an $800,000 limit. There are income limits to the new benefits extention. They are $125,000/yr for a single person and $225,000 for a couple.  A purchase by a dependent is not allowed. See your tax advisor for more details.

The good news is that more people can get tax relief when they purchase their next home through April 30, 2010 or have a binding contract to purchase on April 30th and close by July 1, 2010.

The other good news for home buyers is the historically low mortgage interest rate and the reduced market values for homes. This is a combination that probably won’t be seen again in our lifetimes. Contact your realtor to find the best buying opportunites in your area.

I have lovely coastal homes in all price ranges from Orange County to Long Beach, CA. I will find the right one for you. I’m only a click away!

For first-time home buyers there is a provision to allow up to $8,000 in housing credit for purchases made after Jan. 1, 2009 and before Dec. 1, 2009.  The credit does not have to be paid back if the buyer stays in the home for at least three years. To be eligible as a “first-time home buyer” you either never owned a house before or you haven’t owned (or co-owned) a house within the last three years. The credit is hinged to the buyers income as well with eligibility limited to household incomes of $75,000 annual adjusted gross income for a single taxpayer and $150,000 for a couple filing jointly.  The house/home must be a principal residence purchase (not a second home or investment). A principal residence can be a house trailer, houseboat, co-op apartment or a condominium as well as a single family house.

Under the stimulus plan there is an increase in the conforming loan limits permitted under FHA, Fannie Mae and Freddie Mac to the 2008 high-cost area limits of a maximum of $729,750 (up from $625,500). This is important to all buyers who can now obtain lower interest rate financing to buy even median priced houses in high-cost areas like Southern California. The plan reinstates 2008 loan limits through Dec. 31, 2009.

There is also incentives in the “stim plan” for qualified energy efficiency improvements in existing homes. These credits can be applied to improvements in air-conditioning systems or natural gas and propane furnaces and water heaters. Funds are also allocated for local governments and non-profit groups to acquire and renovate foreclosed and vacant houses that are depressing property values in neighborhoods hit hard by the housing downturn.

The preceding information was obtained through the California Association of Realtors and an LA Times article written by Kenneth R. Harney, published Sunday, Feb. 22, 2009.