Home ownership is a timeless part of the American dream. According to Zacks Investment Research, 67.2 percent of Americans owned their own home at late 2009. The government has offered a tax charge for first-time home buyers to promote U.S. citizens to take the step toward home ownership.


As stated by the U.S. Department of Housing and Urban Development, the tag “first-time house purchaser ” applies to a relatively broad spectrum of applicants. A first-time house buyer is anybody who hasn’t purchased a primary dwelling in the previous three decades. It’s someone whose existing home doesn’t meet local or state building codes and cannot be brought within standards for less than the cost of building a new home. A first-time house buyer is a single parent or displaced homemaker buying a home, even if he possessed a house with his former spouse. Somebody who has only owned a house that is not permanently fixed to a foundation, like a mobile home, is also a first-time house buyer.


Marriage impacts your qualification as a first-time house buyer in several ways. If your spouse has purchased a primary residence in the previous three decades, neither you nor your spouse is considered a first-time house buyer. The home ownership status of both spouses is taken into account when applying for first-time house buyer gains. Divorce changes this. Should you divorce your spouse and are now a single parent, then you are considered a first-time house buyer no matter whether or not you and your spouse owned a house jointly.


A displaced homemaker applying for a house loan is considered a first-time house buyer even if she owned a house along with her significant other when she was a homemaker. In accordance with BusinessDictionary.com, a displaced homemaker is someone at least 30 to 35 years old who hasn’t been employed consistently over a span of many years because she was caring for household, but is now forced into the work force out of economic necessity. To be eligible as a displaced homemaker, you cannot have worked full time for 12 consecutive months before couple of decades. You should be unemployed or underemployed and be experiencing difficulty getting employment, all of the while caring for your house and loved ones. Should you satisfy these conditions, you are a first-time house buyer. If you are a homemaker who owns a house with your spouse that you purchased in the previous three decades, and you are dwelling in the house with your spouse, you are not a first-time house buyer.

Benefits for First-Time Home Buyers

There are several programs that assist first-time house buyers. Down payment assistance programs help pay for closing costs or to get the down payment on a house. To be able to apply, you should have good credit and meet income requirements dependent on the size of your loved ones. The federal government offered an $8,000 tax credit for first-time house buyers throughout September 30, 2010, in an effort to invigorate the market and the slumping housing industry. Military service members that were set up for 90 days or more between January 1, 2009, and May 1, 2010, may be eligible for a one-year extension of this advantage.

Who Doesn't Qualify

Not everyone who’s buying their first house qualifies for the government’s home buyer tax credit. Illegal aliens are disqualified. If a person sells or otherwise disposes of the property before the end of the taxable year, he doesn’t even be eligible for the charge. When he acquires the house as a gift or inheritance from a relative–siblings excluded–he doesn’t be eligible. Another disqualifier is if the profits of past-due mortgage revenue bonds financed the purchase of the home.

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