When the new homebuyer’s tax credit was extended last month, the HECM for Purchase Program benefited too. HUD confirmed via an email to RMD that as long as the senior borrower qualifies for both programs, the new homebuyer’s tax credit will still apply to a HECM for Purchase.
Last month, Congress extended the new homebuyer’s tax credit through April 2010. At the same time, the eligibility requirements to receive the $8,000 tax credit were reduced.
While the previous tax credit only applied to first-time homebuyers with salaries of up to $75,000/year for individuals and $150,000/year for couples, the extension raises that requirement. The tax credit will now apply to first-time homebuyers with salaries of up to $125,000/year for individuals and $225,000/year for couples. These changes make the vast majority of the US population eligible for the tax credit.
In addition, a new $6,500 tax credit has been added for those wishing to move out of their current homes into more expensive ones. This tax credit can also be used in conjunction with the HECM for Purchase Program.
The application of the tax credit should be a tool reverse mortgage lenders can use to promote the HECM for Purchase program and help seniors seeking to buy a new home or upgrade to a nicer home.
For more information on the Move-Up/Repeat Home Buyer Tax Credit, prospective borrowers can look at the National Association of Home Builder’s FAQs: For more information on the New Home Buyer’s Tax Credit, visit here.
Write to Reva Minkoff