$8,000 First Time Homebuyer’s Credit

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Are you sitting down? Do you have a pen and paper handy? Looks like the $15,000 tax credit to buy a new home has been scrapped, saving $35 billion from the stimulus package, and replaced with an extension to the $7,500 and an increase of that credit to $8,000. The $7,500 first time homebuyer tax credit was set to expire July 1st, this $8,000 provision would extend that. CNNMoney is reporting that the credit is available for those who buy a home between Jan. 1, 2009 and Dec. 1, 2009 (source).

The cost of the extension and modest increase is pegged at around $2-3 billion. Another key provision? The repayment requirement will be nixed. That means the $7,500 15-year loan at 0% interest will now become $8,000 cash money in your pocket. I believe existing borrowers would have that loan forgiven.

Home buyers who hoped for a $15,000 tax credit to buy a new home, as promised by the Senate, will be disappointed. A proposed $35 billion credit to support home sales was jettisoned in favor of a more modest $2 billion to $3 billion provision.

The proposal would eliminate the repayment requirement in an existing tax credit for first-time home buyers, and raise the credit to $8,000 from $7,500. Congressional aides cautioned Wednesday that the credit’s size was still subject to negotiation.

Congress Strikes $789 Billion Stimulus Deal [Wall Street Journal]

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164 Responses to “$8,000 First Time Homebuyer’s Credit”

  1. nickel says:

    I’ve heard that the $8k version applies from Jan 1 – Aug 31, that it won’t have to be paid back, and that it’s for first-time homebuyers only. The problem is, you can only find a sentence or two here or there. There hasn’t been anything definitive released yet (afaik).

    • Modder says:

      I would also assume it phases out at $150k like the prior $7500 proposal. Cool for rural markets, useless for urban centers where people make more money and housing costs more. Rural Indiana rejoice, coastal areas – forget about it..

  2. Ray says:

    I recently filed my taxes and am expecting my refund any day now; I took the $7,500 first time homebuyer credit as we bought our first home in May 2008.

    Now that the new stimulus plan has passed, will we receive $8,000 back instead of $7500? And will we still have to repay the $7500? I am still somewhat confused as to what happens from here.

    • david says:

      I think they are going to forgive your loan to prevent people from filing 1040x amendments

    • Robert says:


      Am to understand that you purchased a home in May 2008 and on last years 2008 taxes you filed for the home buyers credit. Did you actually receive an additional $8000.00 from the government that you were able to put into your pocket? I am not quite sure what to expect. Please get back to me. Thanks so much!

    • Dustin says:

      I also filed my taxes in early February claiming the homebuyers credit. Now I’m confused as to what to expect from my return (which hasn’t arrived yet): the original $7500 (with the pay-back clause), or the new $8000 and no pay-back. Checking with others on this, and I’ll pass along whatever I find.

    • michele says:

      I agree on the confusion. We purchased a home during Aug 08′ and want to know if we are going to have to pay it back if those that purchase a home during 09′ are not going to have to.

      • Jace says:

        If you bought in the calendar year 2008, you are not eligible for the $8,000. You can still claim the $7,500 recapturable credit (you will have to pay it back). For those individuals who purchased, or are going to purchase in 2009, they may claim the $8,000 credit and not have to pay it back, but not the $7,500.

        In conclusion:
        Bought in 2008 = $7,500 and payback
        Bought in 2009 = $8,000 and no-payback

        The government completely fumbled this one. They enticed homebuyers at the end of 2008 with the $7,500 and then pull the rug out from under them and deny them the amended credit.

  3. saladdin says:

    I’m with nickel. I can’t find anything except for the same two sentences anywhere. Read that the bill will be posted sometime today on the house/senate site.


    • Confused says:

      I read the entire wording on the White House website and it looks like the $7,500 would have to be repaid for people that bought their house prior to Dec. 2008. I bought my house in May 2008 also and took the credit. I might have just misunderstood the wording, but nowhere did it state it would not have to be paid back. That wording only applied to the “new” tax credit.

  4. MoneyNing says:

    Where do they come up with these dates and numbers? Why $8,000 and not $8,200? How come it’s until Aug 31st? Wouldn’t ending it at the end of a quarter (or better yet, for one calendar year) be more appropriate?

    Then again, if they are “wasting their time” with these details, how can they have enough time to figure out how to save our economy?

    • Djfarout says:

      The object of it, is to stimulate the economy. They want to put a fire under people to try to get them to purchase homes(or large items). Intern putting more money in the economy. And hopefully creating jobs and a cycle of wellness.

      I purchased my home in November. I hope I get the extra $500.

  5. bmf says:

    Are the dates for 2008 or 2009? The old $7500 plan was 08. Is this just a continuation until Aug. My wife and I closed on our house in Jul 08′

    • Jason says:

      It looks like they are extending the current dates from the 7500 credit. So if you closed in July 2008 your golden and maybe $500 more in the bank.

  6. Chal says:

    Figures, I was praying for that 15k.

  7. aaron young says:

    We qualified for the 7500 dollar tax credit because we bought our house in may of 2008. Is the proposed plan going to forgive that loan in this stimulis package

  8. Rob says:

    I thought I read elsewhere that the old $7500 new homeowner “credit” was not changed by the stimulus bill. It would remain the same no interest loan and that the new $8000 plan would go into effect on new homes purchased starting 1/1/09 and it was a true credit.

    I purchased my 1st home in Oct. ’08 and I’ve been holding off filing my taxes hoping to learn that the credit would be retroactive, but I don’t believe it is. I’d love to see some proof that I am wrong though.

    • Robert says:

      I think this is the most accurate answer so far. I have done extensive research and kept myself updated on the latest news. So far, Rob’s answer seems on the right track.

      I myself closed on my first home in October of 2008. Unless the new stimulus bill REPLACED the Recovery Act of 2008 (which I do not believe to be true), people who purchased homes before January 1, 2009 will still be eligible for the $7,500 credit… but the caveat is that you will have to pay it back.

      Those who bought after January 1, 2009, will receive $8,000 with no obligation to pay back.

      Those who bought before 1/1/2009, you (and I) didn’t just miss out on an extra $500. Technically, we missed out on the entire $8,000.

      Nonetheless, I can’t complain about a 15-year term interest free loan.

      Regardless, my accountant is looking into this now. I will update when I get more information.

  9. thomas says:

    I hope that the senate/house realizes we were in a recession last year. If they are going to reward people for buying in a recession, it should apply to those who actually did that.

    Even though this may retro and give me 8k for free, I still think the entire bill is going to destroy the US.

    • Jeff says:

      I believe the intent of the credit is not to reward for past purchases, rather, to spur new (more)purchases (you don’t need to be spurred to purchase, you have already done so. Evidently when you purchased, you were satisfied with the terms and conditions which existed at the time or you probably wouldn’t have purchased. That purchases made by people afterwards may entitle them to a better tax credit, a lower home price, a lower interest rate, is just a result of the crap shoot that life is.

      • Amy says:

        I have to say, I’ve been a little miffed at the idea that this $8000 credit that won’t have to be paid back will probably not do me any good since I closed on December 30, 2008. However, I’ll admit that Jeff has a point when he mentions that people who purchased homes last year were happy with the conditions at the time. As much as I’d like to gripe about missing the extra cash by two days—and I will probably still simmer about it for a while—I can grudgingly acknowledge that special incentives come and go, and it truly is a crap shoot. Of course, admending the credit to the starting dates of the old credit might not be a bad idea—the people who closed on January 2 did not know a credit was coming, so why should they get the additional money and not those of us who purchased a little sooner? Why backdate to January 1 instead of just offering it to people who purchase from this point forward?

  10. Mobility says:

    “I still think the entire bill is going to destroy the US.”


    • Toader says:

      Unfortunately, we’ll never know if the “do nothing” approach would’ve been better, even though it seems to me that a lot of very smart people warning of financial catastrophe should be enough to give even the most conservative and libertarian among us pause. If the economy continues to tank, naysayers will claim that the stimulus ruined the country. If the economy recovers in a year or two, naysayers will claim we’re lucky that stimulus didn’t destroy us.

      People complain about what specifically the stimulus gets spent on…but I agree with one things I read…in response to complaints about funding for the arts, an economist remarked that it doesn’t matter if a million construction workers get jobs or a million artists. A million jobs means a million sets of paychecks to buy stuff that keeps stores opens and car dealers selling and restaurants cooking.

      I don’t really understand what the alternative was to a stimulus/spending bill.

    • Djfarout says:

      I agree! They should have let the big corporations fail. And let the mom & pop shops thrive!

      Now everyone is gonna fail.. and my kids are gonna have a huge shit storm to pay off!!

    • Jeff says:

      While I too have some philosophical reservations about this bill, and am not sure we can fix our problems by simply throwing more money at them, I don’t go so far as to believe this will destroy the country. If we are going to drop nearly a trillion dollars into a project, I would much prefer it be spent on the people of our country, the infrastructure of our country, public assistance to our citizens in these hard economic times, than to be spent on a mis-guided war we were PROMISED would cost a mere 80 billion to conduct (the rest, we were told, would be covered by the oil revenues)

  11. Ronnie says:

    I read in a cnn report the new deal is for Jan-1 2009 to Aug-31 2009, I still have yet to see details though……..

  12. Single mom of 2 boys says:

    I qualified for the first time homebuyers tax credit in every aspect except for the date of closing, January 31, 2008, which was before April 9, 2008. So no credit. I was hoping the new stimulas package would either include all of 2008 first time home buyers or a lower interest rate for current homeowners. It doesn’t look like either one is going to happen so the new Stimulas won’t help me. I’ve tried to refinance my house and car and the banks answer is now because the economy is so bad. Any advice from anyone is appreciated.

    • Denise says:

      Hi….I totally know how you feel. We bought our house on March 14th of 2008. We get no credit at all. Dont understand why they picked April 8th, why isnt it for the whole year of 2008?

      • single mom of 2 boys says:

        How does it feel to be a first time home buyer in 2008 before April 9, 2008? I found out.

  13. Daisy says:

    If you buy a house do you automatically get the $8000 or do you only get the amount that you have to pay in taxes back? If it is the amount that you have to pay in taxes, is it over the course of 2 years?

  14. Patrick says:

    It seems that there is still no definitive answer on whether existing first time home buyers will get the $8,000 in the form of a true tax credit and not a repayment. I hope that it will be given as cash as I am a first time home buyer last year 🙂

  15. Jane says:

    The conference report is now available on

    The conference agreement extends the existing homebuyer credit for qualifying home purchases before Dec 1, 2009. The maximum credit is increased to $8000 and waives the repayment of the credit for qualifying home purchases Jan 1, 2009-Nov 30, 2009. A 2009 purchase may be treated as occurring on Dec 31, 2008. If home is disposed of and ceases to be the principal residence within 36 months of purchase the present rules for repayment apply. The effective date: the provision applies to residences purchased after Dec 31, 2008.

  16. Jane says:

    The existing law still applies except as noted in the earlier post. There are also changes in regards to the DC home credit and mortgage revenue bonds.

  17. Jordan says:

    I heard that they were going to get rid of the $7,500 if you did not buy a house after January 1, 2009. Has anyone else heard this? I hope it is not true.

  18. Jack says:

    You can always depend on our goverment to get your hopes up just to have them tear them down. If you offer a credit to all buyers leave it.

  19. KatieS says:

    I feel that this $8,000 credit is a slap in the face to everyone who bought a house under the old $7,500 credit provisions. We went out and did exactly what the government wanted us to do by buying homes to “stimulate” the economy and now we get to watch those who sat on their hands and did nothing because they were too afraid reap the benefits. I closed on my house on December 28, 2008 and have to pay back my “credit”, but those who closed just 3 days later don’t. How is that fair?

    It’s not and that is why I won’t be paying mine back! Oh, the government will think that I am. Every year for the next 15 years I will dutifully add $500 to my yearly tax payments, but then I’ll just find a way to skim $500 off somewhere else. A madeup charitable contribution here, a little less small business income there. I have never, ever cheated on my taxes before, but you can bet, for the next 15 years I will cheating to the tune of $500 per year.

    • SpecK says:

      Or, you could take the $7500 credit and pay down your balance, and pay less over the life of the loan. That’s some curious morality there that you can suddenly break the law because new programs have been instituted. The tax code changes every year, and is somewhat irrational like the whole housing bubble in general. Your scheme will be that much more clever when you get audited.

      I wasn’t waiting for the government to pile on more pork, I was building up a downpayment and waiting for the market to bottom. I’ll take the $8000 credit since I was planning to buy a home anyway, but I wish the government would grow up and come up with plans that will work for the long term instead of using scare tactics to railroad the pork train down our throats.

    • joe says:

      It sounds like you do already… The bill has not been signed yet so changes can be made and already your moral compass is waaaay off. Thank the good Lord you at least have the option of getting a home and having a ZERO interest loan. There are many people living hand to mouth. Think about that.

    • Ronnie says:

      BOO HOO! I did’nt know there was so many whiners like you who bought homes. So don’t take the interest free loan. Also I bet you always cheat on your taxes the way you sound. Hopefully this all comes back on you. Your another reason why the things are the way they are. Good job tax cheater!

    • Temeka says:

      I completely agree KatieS. It is a slap in the face. We closed on 8-8-08 and we just finished our taxes and rec’d the $7500 “credit” and have to repay. I think they should back date to cover everyone that originally qualified. Not fair!!

      • David says:

        I agree! I closed on my first house on 10/12, and I qualify for the “credit.” If I take it, then I will get a nice bit back, but yet have to repay it over the next 15 years. And if I sell the house within that 15 year time period (which I will), I’ll have to repay in full that next tax time. That’s crap. Why should I take an interest free loan from the IRS?

        I’m with Tameka; they should make the credit a true tax credit for everybody.

  20. Nathan says:

    I agree Jack. If the report is final then Congratulations 2009 home buyers. We bought our home in Oct. 2008. We bought the home with the government telling us we can take a $7500.00 credit. I qualified for the credit. Now, possibly, no credit & 2009 buyers get $8,000. We put almost all we had for closing during a recession, but I didn’t worry because the government saw our need just to take it away.
    I hope I’m wrong.

  21. Nic says:

    So OK. What is the current temperature on those who did get the 7500$ “loan” during the last year. I purchased my home late November, only to hear that those who purchased a month after got this money as well for FREE. I’m none too happy. I might just sell the home and probably not make any money off of it, and make the gov’t pay for the 7500 they gave me since they forgive it. Eat that.

    Does anyone have a status update on repayment for that 7500?

  22. Opinion Aided says:

    I just read the final bill that was negotiated, and forgiveness of repayment for the tax credit is limited to houses bought after Dec 31st 2008 but before December 1st 2009. If you bought a house under the old credit last year, it looks as if you’re going to have to repay it.

    Don’t feel too bad though, I’m looking to buy my second home this year, and the moron politicians just took away the $15,000 I was going to get back. Anything put in this bill to stimulate the economy has been stripped down or completely taken out. They negotiated 50 billion out of the final price and took away tax breaks for houses, cars (the two biggest hit industries), and lowered the tax break to $400 a person. You mean to tell me that there was nothing else they could’ve cut out of the $800 billion dollar bill?

    All things considered, I was still against the bill even with $15,000 coming to me, but if it was going to pass anyways, it would have been nice to put away $15,000 for when they raise taxes to pay for all this spending. Goodbuy America, hello socialism.

    • Dalton says:

      Opinion Aided,

      Where did you read the final negotiated bill at? I can’t find it anywhere and would like to read the language for myself. Thanks.

  23. Mobility says:

    I’m struggling to understand what *right* you guys have to have your old provision changed?

  24. TLN says:

    We purchased our house in July. We have not filed our taxes yet. Are we still elgible for the original 7,500 or when this new bill takes effect will we not get anything?

    • Thomas says:

      I believe that you are eligible to get the First time home buyer credit of $7,500 as a loan. The new law states that the credit of $ 8,000 is for the first time home buyers from Jan 1, 2009 to Dec 31, 2009.

  25. Andy says:

    The new home buyer bill is still confusing. Will new buyers get the extra $500 if they claimed the credit last year? Is the old tax rebate of $7500 now a credit. A lot of unaswered questions still to be worked through.

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