We’re all playing the guessing game as to whether or not the $8000 tax credit will be renewed. There are those that have made the conclusion that it’s almost certain – after all, hasn’t it helped some buyers make the decision to move forward with their purchase of a new home?

I’ve enjoyed helping several first time buyers recently. And yes, a few were motivated by the tax credit, and others were ready to purchase regardless of the motivating dollars. So, the Realtor buzz is “can we get all these loans closed before December 1″? Of course, it all remains to be seen if an announcement will be made late November that there will be an extension and all our panic was unnecessary.

Now you need to hear the rest of the story. Of course, there’s always another piece to the puzzle. News released today discussed the fraud that had already occurred with the tax credit. Some applications for the credit are being investigated because it appears they are under-age buyers. Four years old! When there’s cash to get there will be someone willing to give up their morals and ethics. Now I’m picturing getting the signature of the four year old that supposedly purchased his new home. Crayons, maybe. Lots of candy in the back seat of my car as we toured the city. Could have been an easy client!

By now everyone has heard of the $8,000 first time home buyer tax credit. Definitely it is a wonderful opportunity for some to become home owners. There are multiple web sites giving the details but I will give you a quick run-down.

It is interesting how quickly these guidelines have changed, with some agencies trying to make the credit dollars available at the time of the purchase to use for down payment obligations. My understanding is that option has now been completely eliminated. Stay tuned – anything can change!

Purchasers claiming the credit cannot have owned a home within the last three years – that constitutes a “first time” home buyer. The tax credit is equal to 10% of the home’s purchase price – up to $8,000. There ARE income limits. After complying with all the requirements, claiming the credit is as simple as filing a tax return. (Did I say “as simple as”?)  Any home that is considered to be the principal residence will qualify; houseboats, townhouses, condos, mobile homes, etc. Purchases from January 1, 2009 to December 1, 2009 can qualify. Let’s see, can I anticipate a “rush to purchase” in November? My advice, don’t wait. Lenders are facing new guidelines in July that could extend the closing period by weeks.

Act now – this happy little benny won’t last long!!

Borrowers should always consult their tax advisor regarding any tax incentives.