Who Qualifies as a First Time Home Buyer

The U.S. housing market has seen better days. With falling property values and escalating foreclosures, the real estate market needs a lift. Mortgages are generally more difficult to obtain, and larger down payments are typically required of anyone hoping to purchase a home. However, the federal government is trying to make things easier, especially for first-time homebuyers. This year, in conjunction with the Housing and Economic Recovery Act, the government began to offer first-time buyers an $8,000 tax credit on the purchase of their home. Additionally, the government stipulates that the tax credit does not need to be repaid, as long as the buyer does not sell the property within three years of purchase. Any kind of residence is eligible for this program, whether it is a single-family home, condominium, town home or mobile home. Even houseboats fall into the category, as long as they will be utilized as a primary residence.

There are simple guidelines to determine who qualifies as a first-time homebuyer. You must not have owned a home as your principal residence for the past three years. If you are getting married and planning to buy a home, neither partner can have owned a home as his or her primary residence for the past three years.

If you do own property, there are still ways to determine who qualifies as a first-time homebuyer. If you have purchased a vacation home and reside there for only a brief part of the year, you may be eligible. Also, if you own rental properties and do not live full-time in any of them, you may also qualify for the first-time homebuyer program. Additionally, if you have purchased a home for another person such as a family member, and you do not live there, you may also be able to be regarded as a first-time homebuyer. In any case, it is recommended that you speak with a tax specialist to confirm your eligibility.