Highlights for New 2009 Stimulus Bill for First Time Home Buyers by Hilda Garcia, Cornerstone Mortgage.

First-Time Homebuyer Credit of Up to $8,000

Qualified first-time homebuyers who purchase a home in 2009 beforeDecember 1, 2009 will receive a tax credit of up to 10% of the purchase price(up to $8,000). Homebuyers can claim the credit on their income taxes, andreceive money back in excess of taxes. For example, if you are owed a refundof $1,000, you could now receive up to $9,000 back.

Program details:•

 The credit does not have to be repaid, provided the home is owned formore than three years.• To be considered a first-time homebuyer, the purchaser (and spouse)must not have owned a home for three years prior to home purchase.• The home must be the purchaser’s primary residence; only single familyhomes qualify.• Full credit will be issued to individuals with an adjusted gross income of nomore than $75,000 ($150,000 on a joint return). Individuals with incomesover $95,000 ($170,000 on a joint return) will not receive the credit.• The new credit may be combined with state/local revenue bond moneyto help finance the home purchase.

Tax Credit for Energy Efficient Home Improvements

The tax credit is now 30% of the cost of the improvements (up to $1,500).Eligible improvements include insulation, central A/C units, heat pumps, waterheaters and energy efficient exterior doors and windows.FHA, Fannie Mae and Freddie Mac Loan LimitsThe new law reinstates 2008’s loan limits for FHA, Fannie Mae and FreddieMac through December 31, 2009. The limits were equal to the greater of 125%of the local area median home price, or $271,050 for FHA and $417,000 forFannie and Freddie (overall maximum cap of $729,750). In some areas wherethe limits were higher, the higher limits will apply.

Tax Relief and Benefits for Families•

A payroll tax credit will provide up to $400 per worker ($800 per couplefiling jointly). The credit phases out at $200,000 for couples fi ling jointlyand $100,000 for single taxpayers.• A new (partially refundable) tax credit off ers a maximum of $2,500toward college tuition and related expenses for 2009 and 2010.• Unemployed Americans can now claim up to 33 weeks of benefitsthrough December 2009. Benefits will be increased by $25 a week, whilethe first $2,400 received will be exempt from federal taxes.• Laid-off workers who buy into their former employer’s health insurancethrough the COBRA program will receive a 65% subsidy on premiums forup to nine months.