The Federal Tax Credits Blog

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Question: If my parents get a home equity loan for me to buy a condo in cash, can I simply pay their monthly payments?

I would like to purchase a non-warrantable condo (due to a minor litigation in the building) that has been foreclosed on. I would have to pay cash as the litigation will not close before the November 30th first time home-buyers credit expires and I would like to get it at a reduced price. I plan on securing a traditional mortgage once the lawsuit has been cleared, but until then I only have approximately 60,000 of the 150,000 necessary for a proper offer (The parents’ loan would supply the rest).

I realize it cannot be considered a gift as it is much larger than 12,000 and I will be paying the monthly payments/paying off the loan once I get a mortgage. I am worried of the tax repercussions for myself/my parents as the loan will only be open for 2-6 months.

Answer: to be safe, write up an agreement on this loan, terms, dates, time etc and be sure to state some amount of interest
This probably will not ever happen but it is safe to state this interest because if it is not, it will be imputed by IRS at some time in the future
one never knows how long a law suit may last and your purchase seems to be contingent on this event

First Time Homebuyer Tax Credit

Question: Questions about the housing rescue bill?

I am a first time home buyer and I’ve heard that I can receive a credit of $7500 for buying a house.

Every time I call a mortgage lender they act like either I’m from Mars and I don’t know what I’m talking about or they say they don’t have any updated information to tell me.

Who can I call or where can I find out additional information about this. I want to make sure I make the appropriate downpayments and follow the rules to make sure I’m elgible.

Who can tell me more about this? What resources are there out there? It seems like Congress passed a law and no one knows about it. Is anyone with a pulse eligible that is a first time home buyer?

Answer: First time home buyers, is a “Loan” that you get from the government that you have to pay back each year when you file for your income taxes.

Lenders do not like this credit at all because it ends up as a “phantom” down payment. What i mean is you have to pay it back and increases the risk to the lender.

More information found in my link below.

Las Vegas home sales fall 11 percent in June

July 09–The tailwind from the homebuyer tax credit has ended and some housing analysts are concerned the market may be headed for further decline.

Home Buyer Tax Credit Update, Use $ for Down Payment