First-Time Homebuyers to Get Big Tax Credit - NBC 5 Dallas-Fort Worth

First-Time Homebuyers to Get Big Tax Credit

Obama's stimulus package designed to encourage more people to buy.

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    President Barack Obama signed the largest spending bill U.S. history Feb. 17.

    First-time homebuyers can expect a big tax credit this year, thanks to President Barack Obama's stimulus package signed into law Feb. 17.

    Under the American Recovery and Reinvestment Act, single first-time homeowners with an adjust gross income of $75,000 or less, will receive an $8,000 credit on their next income tax return.

    For those filing a joint return, the maximum income goes up to $150,000.

    In July 2008, the Bush administration passed a similar tax credit to help stimulate the housing market, and encourage more people to buy homes. The Bush tax credit gave first-time homebuyers the option of receiving a $7,500 interest-free loan that had to be repaid within 15 years.

    Unlike the first-time homebuyer tax-credit created under Bush's leadership, Obama's $8,000 credit is free money for homebuyers. It is not a loan but a gift.

    "I like that the $7,500 loan that Bush implemented is now an $8,000 grant," said Fort Worth Real Estate Broker Dustin Collett.

    Under the law,  banks are also receiving finacial incentives for loaning money to homebuyers.

    "I think it will slow the rate of foreclosures," said Collett, a broker and owner of Weichert, Realtors and Collett & Company. "But I don't know that it will entice the banks to start lending again."

     Obama's tax-credit applies to all first-time buyers who purchase a home in 2009.