How does the First Time Home Buyer Credit work?

I have gotten a lot of questions about the first time home buyer credit that was passed into law recently and here is a brief summary. This program allows eligible first time home buyers from 4/9/08 through 6/30/09 to receive up to a $7500 tax credit on their home purchase. Certain income restrictions apply and the credit is paid back over the next 15 years on your income taxes. It is in essence, a tax-free loan from the government. So if you have recently bought your first home, you can put the credit on your 2008 tax returns. For those buying after Jan. 1, 2008 and before June 30, 2009 it will go on your 2009 taxes.

The reason the gov't passed this program is a for a hopeful domino effect. This extra money will encourage someone to buy their first home thereby enabling the seller to buy a new home and so on. They are hoping this will add new buyers to the current slow market.

Feel free to call or email if you have any questions on this, it is an excellent program for first time buyers but just remember you do pay the money back...it is now free as some people are saying.