Real Estate Matters
Real Estate Matters: Tax credit for first-time buyers doesn't hinge on seller's status
Q: Can first-time home buyers qualify for the tax credit if they buy from an individual seller who is holding the mortgage and the seller did not live in the home previously?
A: The tax credit doesn't have anything to do with the seller. Whether the seller lived in the property or rented it out doesn't affect a buyer's ability to claim the tax credit.
If you otherwise would qualify for the $8,000 first-time-home-buyer credit or the $6,500 repeat-buyer tax credit, you should be fine, even if the seller gives you financing.
All that matters is that the buyer is going to live in the home as a primary residence, is not buying the home from a close relative and meets the other means testing (such as family income and the price of the property). Find out more at http:/
Q: My husband and I are both on the mortgage and the deed of the house. Can he refinance in his name only if I agree to it? I would like to be off the mortgage and stay on the deed. Is it possible?
A: In general, your husband should be able to refinance the property, he can be solely responsible for the debt, and you should be able to remain on the title.
In today's market, refinancing can be tricky, with declining home prices and additional lender restrictions and requirements. If you need to include your income in the application for refinance, you probably will need to be on title when you refinance and will need to sign the note and mortgage.
If, however, you and your husband can refinance without showing your income, you might be able to have the lender exclude you from the loan and mortgage while you stay on the title. You might have to waive your rights of homestead to the property and certain marital rights to the home to enable the lender to foreclose should the loan go into default.
Q: I own a rental home. For the past five years, I have rented it to my youngest son. I have my own principal home and intend to keep it. Is there a way he can legally purchase the rental property from me and still be eligible for the $8,000 first-time-home-buyer tax credit? Can I transfer the property to a third party through a quitclaim deed, which can then sell him the property?
A: I'm sorry, but as far as I know, the answer is no. Your son won't qualify for the $8,000 tax credit by purchasing a property that you own.
Internal Revenue Service rules specifically state that you cannot buy a home from a parent, grandparent, child, grandchild or parent-in-law.
Your question about transferring the property to a third party is interesting. Let me see if I have it straight: You're suggesting that you circumvent the tax-credit law by transferring ownership of the property to someone else, who would then turn around and sell it to your son. Your son would collect the $8,000 tax credit, and you would rid yourself of the investment property.