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GRAND RAPIDS, Mich. (WOOD) - By this time next week, Chris Hofstra and his wife expect to owntheir first home. And if everything goes as planned, when they dotheir 2009 taxes next year, the Grand Rapids couple will get $8,000back.
It's available to first-time homebuyers or those who haven'towned a home in three years under the $787 billion economicstimulus plan signed into law earlier this week. The new credit isfor 10 percent of the purchase price of a home bought on or afterJanuary 1 and before December 1. The maximum credit is $8,000.
The credit directly reduces the taxes owed to the federalgovernment. So if a taxpayer owes nothing or is due a refund, he orshe would receive the entire amount of the credit in cash.
"I see that as just a catalyst -- to complete what we wanted todo in the first place," Hofstra told 24 Hour News 8. "We wanted tobuy a house."
But the new homebuyer credit is designed to be a stimulus: toconvince those who weren't definite home buyers to take that step.Hofstra's realtor, Steve Volkers, of Keller Williams, says he'sreceived a few emails asking about the new credit. Realtor DianeGriffin, also of Keller Williams, says she's had a couple ofcalls.
Treadstone Mortgage broker Zac Ellerbroek says he's seen signstoo.
"It's getting a lot of people off the fence," Ellerbroek said.Some of his callers have asked about the difference between the newcredit and an older one. Both were for first-time homebuyers orthose who haven't owned a home for three years.
Under both credits, would-be homebuyers can only get the maximumif they make $75,000 or less as an individual or $150,000 as acouple. Individuals making between $75,000 and $95,000 and couplesmaking between $150,000 and $170,000 can receive reducedcredits.
The old was effective between April 9 and December 31 of lastyear had a maxmimum of $7,500. And the old one had to be paidback.
"Eight thousand dollars -- that's $500 more and we're not payingit back, it's even better," Hoekstra said.
Not everyone has seen signs that customers are aware of theoffer and interested in taking the government up on it.
Rockford Realtor Lu Anne Finlayson says she finds herselfreaching 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. Butshe worries that with its focus on first-time homebuyers, it's notbroad enough.
"I don't know if it's really enough to jump start the realestate market," Finlayson said. Griffin said the incentive couldhave a domino effect. When first-time homebuyers make a purchase,they will make the owners of the homes they purchase free topurchase their second or third home.
Frequently asked questions about the credit can be answered here.
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