It may seem inconceivable to purchase a home in today's stricken economy, but there are generous incentives in place to remotivate first-time home buyers. In 2008, the federal government passed a new tax credit for first-time home buyers. In addition, there are many down-payment assistant programs from which home-buyers can benefit. These incentives not only make purchasing a home possible, but attractive.
New Tax Credit
In 2008, the American Housing Rescue and Foreclosure Prevention Act gave a tax credit of $7500 to new home buyers. The government passed this credit to give a new impetus to the housing economy.
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Function
The tax credit is not so much a credit as an interest-free loan. However, it is a loan that gives you ample time to pay it back--a maximum of 15 years.
Is the Tax Credit Worth It?
Since this new tax credit actually functions as a loan, you may wonder if it is still worth purchasing a home. In fact, it is completely worth purchasing a home because this loan is interest-free, which gives you extra income for repaying outstanding loans and credit-card debt.
Down-Payment Assistance Programs
Another incentive for first-time home buyers is assistance programs that help pay for home down-payments, with many payments exceeding $20,00. These assistance programs are usually county or city-based, though you can also find private companies that provide assistance.
Down-Payment Assistance Requirements
You usually have to fulfill income requirements before receiving a down-payment loan. Most programs endow you with a loan only if you are at or just below the Area Medium Income for your city or town.
Down-Payment Loan Repayment
A down-payment loan is often a forgivable loan. That means you don't have to repay the loan if you continue living at your house for a certain duration, such as five years.