CORRECTION: regarding Federal Housing Tax Credit
After further research into this topic, and a discussion with my CPA, it's time to issue a retraction on this topic.
The Federal Housing Tax Credit IS a refund, even if you do not owe income tax. If you file a tax return and can qualify to claim this credit, you will receive this money in the form of a tax refund.
There still seems to be confusion about this incentive for homebuyers and I hope this helps clear up some of the questions.
However, the clock is ticking. To claim the credit, the real estate sale has to close by December 1, 2009. That's less than 60 days, which may not be enough time, depending on your transaction.
For example, I am working with a very well-qualifed buyer right now on a traditional sale, and the lender is telling me they need a minimum 30 days to close. In the mortgage world, we call these customers a "slam-dunk" because the process is normally very streamlined with a buyer of this caliber. Just as a point of reference- in the past, most lenders could close a purchase transaction in about 10 days.
So, if you are a buyer looking at short sales and hoping to close in less than 60 days to get the tax credit, I strongly recommend you switch strategies and start looking at deals that can close in time. Foreclosures take less time to close than short sales, but time is truly of the essence today.
For a list of bank-owned properties in this area, please visit my website and click on the "Foreclosures" page.
www.MyPinellasParadise.com
