First-Time Homebuyer Tax Credit


DEFINITION of 'First-Time Homebuyer Tax Credit'

A refundable tax credit made available to Americans purchasing their first home. The first-time homebuyer tax credit originally applied to home purchases made by qualified first-time buyers between April 9, 2008, and July 1, 2009. However, the Obama administration extended the original time frame requiring homeowners to have a signed sales contract until May 1, 2010, and gave them until the end of June, 2010, to close the transaction.


Loading the player...

BREAKING DOWN 'First-Time Homebuyer Tax Credit'

The original tax credit implemented a credit of 10% of the home's purchase price, up to $7,500, which had to be repaid over 15 years in equal installments. However, the expanded version of the tax credit increased the maximum to $8,000 and removed the repayment requirement altogether, as long as the buyer stayed in the home for at least three years.

  1. Emergency Economic Stabilization ...

    One of the bailout measures taken by Congress in 2008 to help ...
  2. Build America Bonds - BABs

    Taxable municipal bonds that feature tax credits and/or federal ...
  3. American Recovery And Reinvestment ...

    An act initiated and signed by U.S. President Barack Obama in ...
  4. Mortgage-Backed Security (MBS)

    A type of asset-backed security that is secured by a mortgage ...
  5. Troubled Asset Relief Program - ...

    A government program created for the establishment and management ...
  6. Fair Housing Act

    This law (Title VIII of the Civil Rights Act of 1968) forbids ...
Related Articles
  1. Taxes

    Before You Visit Your Tax Preparer: Do This

    The earlier you start preparing your tax records and documents, the more likely you are to have a smooth tax return experience – and all the tax benefits you're due.
  2. Active Trading Fundamentals

    The Art Of Cutting Your Losses

    Taking corrective action before your losses worsen is always a good strategy. Find out how to keep your capital losses small and let your winners run.
  3. Savings

    Saver's Tax Credit: A Retirement Savings Incentive

    Here's another reason to put money toward your retirement nest egg.
  4. Taxes

    Tax Deductions Vs. Tax Credits

    Understanding the difference between tax deductions and credits is crucial, as the tax strategies that you adopt now can favor one over the other and yield substantially different tax savings.
  5. Taxes

    10 Most Overlooked Tax Deductions

    The receipts you cram into your wallet could be replaced with cash come tax season.
  6. Taxes

    Give Your Taxes Some Credit

    A few tax credits can greatly increase the amount of money you get back on your return.
  7. Home & Auto

    7 Absolute No-Nos When Selling a Home

    Avoid these mistakes if you’re looking to make a quick and easy home sale.
  8. Savings

    How Parents Can Help Adult Children Buy a Home

    Owning a home isn't easy thanks to stringent lending standards. Thankfully, there's ways parents can help their kids buy a home.
  9. Credit & Loans

    HARP Loan Program: Help for Underwater Mortgages

    If you are underwater on your mortgage, this program may be just what you need to help build up equity in your home.
  10. Credit & Loans

    Pre-Qualified Vs. Pre-Approved - What's The Difference?

    These terms may sound the same, but they mean very different things for homebuyers.
  1. Can FHA loans be used for investment property?

    Federal Housing Administration (FHA) loans were created to promote homeownership. These loans have lower down payment requirements ... Read Full Answer >>
  2. Are personal loans tax deductible?

    Interest paid on personal loans is not tax deductible. If you take out a loan to buy a car for personal use or to cover other ... Read Full Answer >>
  3. Does an FHA loan require a down payment?

    Federal Housing Administration (FHA) loans require down payments, which can be as low as 3.5% of the total purchase price ... Read Full Answer >>
  4. Can a 401(k) be used for a house down payment?

    A 401(k) retirement plan can be tapped to raise a down payment for a house. You can either borrow money or make a withdrawal ... Read Full Answer >>
  5. Do banks offer FHA loans?

    Many major U.S. banks, including Well Fargo & Company, U.S. Bancorp, Bank of America and Flagstar Bancorp, offer Federal ... Read Full Answer >>
  6. Does the FHA provide construction loans?

    The Federal Housing Administration (FHA) does provide construction loans for both new construction and rehab projects. The ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Bar Chart

    A style of chart used by some technical analysts, on which, as illustrated below, the top of the vertical line indicates ...
  2. Bullish Engulfing Pattern

    A chart pattern that forms when a small black candlestick is followed by a large white candlestick that completely eclipses ...
  3. Cyber Monday

    An expression used in online retailing to describe the Monday following U.S. Thanksgiving weekend. Cyber Monday is generally ...
  4. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  5. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
Trading Center