To entice first-time homebuyers into the marketplace, an updated First-Time Home Buyer Tax Credit has been enacted, for eligible home purchases between January 1, 2009 and November 30, 2009, which requires no repayment as long as the home is not sold within 3 years from purchase.

** RECENT NEWS ** Currently, HUD has allowed for certain first-time homebuyers who otherwise cannot afford a downpayment on their own to use the tax credit as a downpayment, through the Ohio Housing Finance Agency. Learn more about a first-time homebuyer's down-payment options, including using the First-Time Homebuyer Tax Credit as a down-payment.

Key aspects of this tax credit:

FIRST-TIME HOMEBUYER TAX CREDIT As Modified in the American Recovery and Reinvestment Act
FEATURE	EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009

Amount of Credit	Lesser of 10 percent of cost of home or a maximum of $8,000.

Eligible Property	Any single-family residence (including condos) that will be used as a principal residence

Refundable	Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser. Refunded to purchaser by check or direct deposit.

Income Limit	Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out gradually above those caps to $95,000 and $170,000.

First-time Homebuyer Only	Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase date.

Revenue Bond Financing	Purchasers who utilize revenue bond financing can use credit.

Repayment	No tax credit repayment for purchases on or after January 1, 2009 and before December 1, 2009

Recapture	If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.

Termination	November 30, 2009 is the final date you must close by to claim the tax credit

Effective Date	All revisions are effective as of January 1, 2009

Down Payment Options	One or more options may be available depending on a borrower's situation, including using the First-Time Homebuyer Tax Credit as a down-payment. Learn more.

IRS Form	The IRS requires Form 5405 (First Time Homebuyer Credit) to be filed with your Federal Income Tax 1040 form to claim the First-Time Home Buyer Tax Credit. The same form is for those taking the 2008 or 2009 version, and can be used toward 2008 or 2009 taxes. If you have already filed your 2008 taxes, use IRS Form 1040X along with Form 5405 to Amend your 2008 tax return. For amendment questions and how to use Form 1040X, see Instructions for Form 1040X. If you already received the $7,500 First Time Home Buyer Tax Credit for a home purchase in 2009, use these same forms to receive the additional $500.