$8,000 Tax Credit for First Time Homebuyers
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On February 17, 2009, President Obama signed into effect the American Restoration and Recovery Act ("ARRA", the "Act", or commonly referred to as the "Stimulus Package"). Under the ARRA, the federal government will spend approximately $787 billion dollars on various government initiatives!

A portion of the $787 billion dollars will assist first-time homebuyers in buying their first home with up to $8,000 as a tax credit. In particular, Section 1006(b)(1) of the ARRA provides first-time homebuyers the opportunity to receive the greater of $8,000 or 10% of the purchase price of a primary residence in the form of a tax credit. First-time homebuyers must complete the purchase contract of the home by April 30, 2010, close on the purchase by June 30, 2010, and meet other requirements.

So, what the catch? None, really...the government wants people to buy homes to help stimulate the economy. Therefore, if you're thinking about purchasing a new home, it behooves you to take a look at how the tax credit can assist you in becoming a new homeowner.

In this article, we’ll explore: what is a tax credit; the requirements to qualify as a first-time homebuyer for the ARRA tax credit; show how the ARRA tax credit works; and provide additional resources for first-time homebuyers who may have a difficult time in obtaining the necessary financing for the tax credit.

Next, we’ll explore what is a tax credit.

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