Updated: Thursday, 19 Feb 2009, 6:16 PM EST
Published : Thursday, 19 Feb 2009, 5:48 PM EST
GRAND RAPIDS, Mich. (WOOD) - By this time next week, Chris Hofstra and his wife expect to own their first home. And if everything goes as planned, when they do their 2009 taxes next year, the Grand Rapids couple will get $8,000 back.
It's available to first-time homebuyers or those who haven't owned a home in three years under the $787 billion economic stimulus plan signed into law earlier this week. The new credit is for 10 percent of the purchase price of a home bought on or after January 1 and before December 1. The maximum credit is $8,000.
The credit directly reduces the taxes owed to the federal government. So if a taxpayer owes nothing or is due a refund, he or she would receive the entire amount of the credit in cash.
"I see that as just a catalyst -- to complete what we wanted to do in the first place," Hofstra told 24 Hour News 8. "We wanted to buy a house."
But the new homebuyer credit is designed to be a stimulus: to convince those who weren't definite home buyers to take that step. Hofstra's realtor, Steve Volkers, of Keller Williams, says he's received a few emails asking about the new credit. Realtor Diane Griffin, also of Keller Williams, says she's had a couple of calls.
Treadstone Mortgage broker Zac Ellerbroek says he's seen signs too.
"It's getting a lot of people off the fence," Ellerbroek said. Some of his callers have asked about the difference between the new credit and an older one. Both were for first-time homebuyers or those who haven't owned a home for three years.
Under both credits, would-be homebuyers can only get the maximum if they make $75,000 or less as an individual or $150,000 as a couple. Individuals making between $75,000 and $95,000 and couples making between $150,000 and $170,000 can receive reduced credits.
The old was effective between April 9 and December 31 of last year had a maxmimum of $7,500. And the old one had to be paid back.
"Eight thousand dollars -- that's $500 more and we're not paying it back, it's even better," Hoekstra said.
Not everyone has seen signs that customers are aware of the offer and interested in taking the government up on it.
Rockford Realtor Lu Anne Finlayson says she finds herself reaching out to on-the-fence buyers and letting them know about it. She's hopeful that once people know about it, they'll use it. But she worries that with its focus on first-time homebuyers, it's not broad enough.
"I don't know if it's really enough to jump start the real estate market," Finlayson said. Griffin said the incentive could have a domino effect. When first-time homebuyers make a purchase, they will make the owners of the homes they purchase free to purchase their second or third home.
Frequently asked questions about the credit can be answered