As has been speculated these past few weeks, Congress has pass, and President Obama has signed, the new Homebuyer Tax Credit! This new provision has two new important components.

First, it allows CURRENT homeowners who have lived in their homes as a principal residence consecutively for 5 of the past 8 years to qualify for a $6500 credit ($3250 married filing separate) on the purchase of their new home. First time home buyers will still have an $8,000 credit to purchase a home.

The second new provision is that the income limits have been raised from $75,000 (single) to $125,000, and $150,000 (married) to $225,000. These new provisions don’t take effect until December 1, 2009. They will last until April 30, 2010. If you have a valid contract on April 30, 2010, you will have until July 1, 2010 to close.

See the chart for more detailed changes: Homebuyer Tax Credit Changes

check with your tax account to see how any of these new changes will affect your individual situation.

UPDATE: September 16, 2009:

The Utah Housing Corp has implemented a program to loan money for the $8,000.00 first buyer tax credit to use at closing. The program is called Equity Now and has some conditions. To find out more, click here. Although there are proposals in congress to extend the tax credit, it is still expected to expire November 30, 2009.

UPDATE: August 6, 2009:

To monetize the $8,000 at closing, a bridge loan must be obtained through the state housing finance agency. In Utah it would be the Utah Housing Authority. As of this morning, they are still NOT offering to monetize the tax credit.
As of mid-2009, more than a dozen state housing finance agencies (HFAs) were offering bridge loans to prospective buyers, and many more were planning to do so. Currently, the following states have programs in place: Colorado, Delaware, Idaho, Kentucky, Missouri, Nebraska, New Jersey, New Mexico, Ohio, Pennsylvania, Tennessee, Texas, and Virginia.

Since the program is over November 30th, 2009, you have to wonder if they will be doing this at all. I will keep checking with them and updating here if there are any changes.

UPDATE, May 29,2009: It’s official from HUD’s Shaun Donovan, the hold on this program is now over:

The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today’s announcement details FHA’s rules allowing state Housing Finance Agencies and certain non-profits to “monetize” up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA’s new mortgagee letter, visit HUD’s website.

Don’t wait until you file your taxes to receive the Federal Stimulus money of $8,000. Housing and Urban Development Secretary Shaun Donovan announced that buyers can monetize their proceeds for a down payment through participating banks.

“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan said. According to Donovan, the FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

First time home buyers in Utah who purchase a new construction home or condominium can also take advantage of the Utah’s Home Run Program that allows buyers of new homes a $6,000 grant at closing. With these 2 combined programs, home buyers who qualify can receive $14,000 at closing to purchase their home. With rates hovering in the mid 4% range and prices at 5 year lows, what are you waiting for?

image: hud.gov