First time Home Buyers Program- A Key to your Own Home-The Federal Government's Incentive Program

The housing crisis has virtually brought the housing market to a standstill. Houses are now worth half the price, they were three years ago. Even with the low prices, the recession was so crippling to the economy, that people still would not buy these homes. Prospective home buyers were also in fear that they may lose their jobs, and would not want to commit themselves based on an uncertain future. Banks have frozen lending, and mortgage funding has all but dried up. Thousands of homes went into foreclosure, and many people filed bankruptcy to save their homes. The crisis is so severe, that many real estate

The Banks and mortgage companies have thousand of unpaid mortgages on their books, and many homes that were foreclosed on, in their inventory, that they either have to sell at a loss, or keep the houses until the value is closer to the balances on the mortgage. Even homeowners find themselves in an upside down position. Their homes are valued much less than their mortgages. The housing crisis is at the heart of the recession, and the near collapse of the banking sector. The government as a part of the stimulus package, tried to help the housing industry by offering help to first time home buyers.

1. Tax credits

 2. Down payments assistance

3. Lower interest rates

In order to speed up the sale of the houses on the market, the government offered $8000 as a tax credit to first time home buyers, who purchased their homes between January 1, 2009 and November 31, 2009. The claim must be made within two years of buying the home. Congress recently extended the program to April 2010, and include current home owners, who have been living in their homes for 5 years and over.

 The second option is a down payment assistance program of 10% of the sales price, for example, $10,000 on a $100,000 house. The government also offers you a loan with lower points, which results in lowering the closing costs or a lowering the monthly mortgage. This program is designed to assist individuals with income of up to $75,000, or couples with joint income of up to $150,000.

A final alternative is a tax rebate on the loan's interest. Persons who own investment properties can avail themselves of the tax rebate. This can be used to upgrade the property's value and can be claimed as an income tax deduction.  

 Your real estate agent, and mortgage broker, will guide you through the process, while you search for your dream home.