Breaking News: Senate Plans to Extend and Expand Tax Credit

RISMEDIA, October 30, 2009—(MCT/The Wall Street Journal)-The Senate has reached a compromise on extending and expanding the $8,000 tax credit for first-time home buyers, a boost the housing industry believes will help it pull out of its two-year-old downturn.

While its passage remains uncertain, the agreement would extend the existing credit for first-time homebuyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners, Senate aides said. The reduced credit would be available to all homebuyers who have been in their current residence for a consecutive five-year period in the past eight years. Lawmakers in Washington also raised the qualifying income limits to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000, housing-industry sources said. Under the Senate compromise, buyers must have sales agreements in hand by April 30, but they will have until June 30 to go to settlement, said the sources. The measure still faces votes in the full Senate and the House.

Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan are in full support of the Senate’s proposal to both extend and expand the first-time homebuyer tax credit and called on Congress to approve key housing measures that include the tax credit. “We welcome efforts taken by Congress to extend the First-Time Homebuyer Tax Credit for a limited period. This credit has brought new families into the housing market and contributed to three consecutive months of rising home prices nationwide,” said Secretaries Geithner and Donovan. “In extending the credit, we urge Congress to include strict measures to combat tax fraud and protect responsible homeowners.”

The current tax credit did little for the new-home market in September, the Commerce Department recently reported—news that took many industry analysts by surprise. Sales fell 3.6% from August and 7.8% from September 2008. Industry observers had expected a fifth consecutive monthly increase in new-home sales, believing that the tax incentive for qualified first-time buyers—credited with 357,000 sales of previously owned homes so far this year—would do the trick. Instead, sales of typically more expensive newly built houses slipped. “The decline in new-home sales seems to us to be more a function of the attractive pricing available on resales in the current environment than a reflection of weakening demand,” said Michael Feder, president of Radar Logic in New York, which tracks the market.

“Since hitting rock bottom in March, demand is up 20 percent,” said Joel L. Naroff of Naroff Economic Advisers in Holland, Pa. For Naroff, the robust rise in existing-home purchases—9.2% year over year in September—indicated that the housing market was not faltering. “Maybe the issue is supply, which fell to its lowest level in 27 years,” he said. “Builders, at least those left standing, have been making sure they don’t have any houses sitting around, and they have been very successful in controlling inventories.”

IHS Global Insight economist Patrick Newport echoed that, noting new-home inventories “sank for the 29th straight month to their lowest level since November 1982.” Naroff maintained housing has recovered enough to stand without the tax credit, but Newport said that if the credit were not extended and expanded, housing demand would take a hit, and home sales would drop.

The new provisions are aimed at broadening availability of the credit beyond first-time buyers and giving the weakened real estate market a bigger boost while preventing real estate investors from benefitting. While Senate lawmakers appear to have reached a deal on the substance of the tax credit, they are still at odds over how it would be brought to the Senate floor.

(c) 2009, The Philadelphia Inquirer.

Elk River, Minnesota - History

The hardwood forested hills in which Elk River is situated were pushed up by the last glacier that advanced across Minnesota. These hills are made up of coarse materials which is the reason gravel mining is so prevalent in Elk River and also the reason much of the area is not considered good farmland.


To the south of Elk River lies the prairie. This natural boundary between the prairie and woods was also a boundary between Indian nations. Two battles between the Dakota and Ojibwe took place where the Elk River meets the Mississippi in 1772 and 1773.

Zebulon Pike so named the Elk River because of the herds he saw in the area. David Faribault built a trading post near the conjunction of the Elk and Mississippi Rivers in 1846, which he later sold to Pierre Bottineau. The two rivers and the Red River Trail, which passed nearby, made this area a good location for commerce.

In 1851, Ard Godfrey, a native of Orono, Maine, saw the potential of the water power of the Elk River and built a dam and a saw mill. His dam created the first lobe of Lake Orono (called the Mill Pond), which extended from the present day dam to Orono Cemetery Point. In 1855 the area by the dam was platted and the town of Orono (know as Upper Town) was created.

In the latter half of the 19th century, agriculture replaced lumber as the base of Elk River's economy. Grist Mills and a starch factory, which took advantage of the potato fields to the west, were built.

The Orono-Elk River area continued to grow until by 1860 it had reached a population of 723 people. These early settlers typically came from New England. Elk River's population continued to grow following a slow period caused by the civil war.

By 1870, the Elk River swelled to a population of 2,050 and became the county seat in 1872. Around the same time the railroads replaced the rivers as the main focus of transportation and the Lower Town (the present day historic downtown area) replaced Upper Town as the focus of commerce.

The Orono Dam was destroyed by an ice storm in 1912, but hydropower gave a new incentive to dam the Elk River in 1915. This new dam created the four lobes of Lake Orono as we know it today. In 1916, the Village of Elk River received electricity for the first time. The entire township of Elk River would not get electricity until after World War II.

Charles Babcock, a native son of Elk River and the first Commissioner of Highways for the state, had a visionary plan to "get Minnesota out of the mud." His plan to create a network of paved roads became a model for the rest of the nation and the Jefferson Highway (now Highway 10) became one of the first paved roads in the state. Highway 10 used to cross the Elk River over the dam bridge, but was rerouted to its present location shortly after World War II.

1974 Street Scene replaced the rivers as the main focus of transportation and the Lower Town (the present day historic downtown area) replaced Upper Town as the focus of commerce.

The Orono Dam was destroyed by an ice storm in 1912, but hydropower gave a new incentive to dam the Elk River in 1915. This new dam created the four lobes of Lake Orono as we know it today. In 1916, the Village of Elk River received electricity for the first time. The entire township of Elk River would not get electricity until after World War II.

Charles Babcock, a native son of Elk River and the first Commissioner of Highways for the state, had a visionary plan to "get Minnesota out of the mud." His plan to create a network of paved roads became a model for the rest of the nation and the Jefferson Highway (now Highway 10) became one of the first paved roads in the state. Highway 10 used to cross the Elk River over the dam bridge, but was rerouted to its present location shortly after World War II.

In 1978, the Village of Elk River and the Township of Elk River consolidated to create the City of Elk River. The result was one of the largest land based cities in the state at 44 square miles.

Besides transportation, energy has always played a significant role in shaping Elk River. The first rural nuclear power plant in the US went online in 1960 at Great River Energy's (GRE) site. Meant only as a demonstration site it was dismantled after several successful years of operation.

In the late 1980's, GRE's power plant was converted to burn refuse derived fuel. This innovative source of energy was one factor that helped Elk River receive the designation of "Energy City" by the Minnesota Environmental Initiative in October of 1997. As Energy City, Minnesota's energy industries will be demonstrating cutting edge renewable and energy efficient technologies in Elk River.

The creation of Interstate Highway 94 and the upgrade of Highway 101 to four lanes will greatly accelerate Elk River's growth. Once again transportation is dictating where the focus of commercial activities take place in Elk River as new businesses spring up along the Highway 169 corridor.

HGTV - What's your favorite show?

So what's your favorite show(s) on HGTV? If you are like me you are probably addicted to the network and still even watch the reruns when they are on.

Here's how my favorites rank:

1. Income Property

2. Real Estate Intervention

3. Renovation Realities

4. Holmes on Homes

5. House Hunters

Wal-Mart starts selling caskets, urns online

Okay, I found this article online and thought to myself .."WOW" what won't Walmart sell? enjoy!


The world's largest retailer wants to keep its customers even after they die.

Wal-Mart has started selling caskets on its Web site at prices that undercut many funeral homes, long the major seller of caskets.

The move follows a similar one by discount rival Costco, which also sells caskets on its site.

Wal-Mart, based in Bentonville, Ark., quietly put up about 15 caskets and dozens of urns on its Web site last week.

Prices range from $999 for models like "Dad Remembered" and "Mom Remembered" steel caskets to the mid-level $1,699 "Executive Privilege." All are less than $2,000, except for the Sienna Bronze Casket, which sells for $3,199.

Caskets ship within 48 hours. Federal law requires funeral homes to accept third-party caskets.

The caskets come from Star Legacy Funeral Network, Inc., a company based in McHenry, Ill., that sells the same caskets for about the same price — some less — on its site, along with many others.

Star Legacy CEO Rick Obadiah said the response in the first week has been better than the company or Wal-Mart expected, though he declined to give specifics. A spokesman for Walmart.com also declined to release sales figures and downplayed the venture.

"Several online retailers offer this category on their sites," spokesman Ravi Jariwala wrote in an e-mail. "We are simply conducting a limited beta test to understand customer response."

But Obadiah said it is not simply a test. He said more than 200 Star Legacy products, including pet urns and memorial jewelry, and eventually about two dozen caskets, will be sold at walmart.com. The company also supplies similar types of products to online retailer Overstock.com and urns to Costco's Web site.
Other parts of the Wal-Mart empire also sell funeral wares. The company's samsclub.com site sells casket floral arrangements for about $300.

Part of the business model is to get people to plan ahead: Walmart.com is allowing people to pay for the caskets over a period of 12 months for no interest.

The move gives more power to consumers and helps them avoid high mark-ups on caskets, which can often be several hundred percent, said R. Brian Burkhardt, a funeral director who blogs as "Your Funeral Guy."

"You can get a quality casket for $1,000 rather than pay $2,000, $3,000 or $5,000 in a funeral home. That's where it helps the consumer," he said.

The industry is not too concerned about Wal-Mart entering the market, said Pat Lynch, president-elect of the National Funeral Home Directors Association. Consumers have been able to buy caskets online and from other sources for years, with minimal effect on the business, he said.

Wal-Mart's prices for caskets don't differ greatly from those offered at funeral homes, most of which range from $500 to $5,000, Lynch said. He declined to give an average price, saying a casket selection is a personal one.

He said Wal-Mart can't offer one thing funeral directors do have: the ability to comfort someone during a trying time.

"There's no question in my mind as a funeral director for nearly 40 years that the most critical element is the human contact," he said.

By Emily Fredrix
Associated Press

Vote on Extending Homebuyer Credit Delayed Over TARP

Vote on Extending Homebuyer Credit Delayed Over TARP

Oct. 30 (Bloomberg) -- The U.S. Senate won’t vote until next week at the earliest on proposals to extend both an $8,000 tax credit for first-time homebuyers and unemployment benefits for the nation’s jobless. The administration endorses an extension.

Senate action was delayed by a Republican demand that a vote be allowed on an amendment to end the Treasury Department’s Troubled Asset Relief Program at the end of this year.

Senate Majority Leader Harry Reid, a Nevada Democrat, balked yesterday at the demand by Senate Minority Leader Mitch McConnell, a Kentucky Republican. Reid also took procedural steps to end debate and schedule Senate action on extending the homebuyer tax credit and the unemployment benefits.

“I think the first-time home-buyer credit is a great example of funding that’s helped to stabilize the housing market and should be extended,” Jared Bernstein, chief economist to Vice President Joe Biden, said on Bloomberg television. Treasury Secretary Timothy Geithner gave his support yesterday.

Lawmakers announced plans earlier this week to attach the tax-credit proposal to a pending bill on the unemployment benefits. The $8,000 tax credit, enacted earlier this year as part of the $787 billion economic stimulus package, is set to expire at the end of November.

April 30

The lawmakers want to extend the credit until April 30. Their proposal would also expand it to allow higher-income Americans and some who already own homes to qualify for the break.

Homebuyers who have lived in their prior residences for at least five years may receive a credit of $6,500 under the plan, said Senate Finance Committee Chairman Max Baucus. Also, couples earning as much as $225,000 and individuals as much as $125,000 would qualify for the extended break, Baucus said. That’s up from a $75,000 limit for individuals and $150,000 for couples.

“The success of the American economy is closely tied to the success of the housing market; by helping to stabilize the housing market, the homebuyer tax credit has helped to shore up the economy as it begins to recover,” said Baucus, a Montana Democrat. “This would enable an even greater number of potential homebuyers to take the credit.”

Drop in Prices

Lawmakers said they want to prevent home sales from slipping as the economy struggles to recover from the worst drop in home prices since the Great Depression.

More than 1.2 million borrowers have claimed $8.5 billion of the $13.6 billion set aside for the homebuyer tax credits this year, according to the Treasury Department. The Obama administration, in endorsing the extension yesterday, said the credit has helped stabilize the nation’s housing market.

The tax break “brought new families into the housing market and contributed to three consecutive months of rising home prices,” Geithner said in a statement.

The measure would require those receiving the tax break to remain in their new homes for three years and they would have to repay the credit if they don’t.

Those buying homes worth more than $800,000 wouldn’t be eligible for the credit, said Baucus. Lawmakers also said they won’t extend the break beyond the new April 30 deadline.

‘Last Extension’

“The American people should understand this -- and the affected industries -- this is the last extension,” said Senator Johnny Isakson, a Georgia Republican who cosponsored the plan. “Tax credits like this only work by creating the sense of urgency to take advantage of them.”

Isakson estimated the new plan would cost $10.2 billion. Senate Banking Committee Chairman Christopher Dodd said the plan wouldn’t add to the government’s budget deficit because lawmakers plan to finance it by delaying a tax break for multinational companies scheduled to take effect next year.

The bill that would include the tax-credit plan calls for extending unemployment benefits by 14 weeks in all states and by an additional six weeks in states with the highest jobless rates. That bill has been stalled for weeks because of an ongoing dispute between Reid and McConnell over amendments to the measure.

McConnell yesterday dropped his demands for votes on amendments related to immigration and the community activist group ACORN. He held firm on his push for the TARP-related amendment.

The proposal would remove Geithner’s ability to unilaterally extend the TARP program beyond its Dec. 31 expiration date to October 2010.

“It seems to me there should be a better time to have this debate,” Reid said.

Any legislation the Senate passed would have to be reconciled with a House-passed bill last month that didn’t include the tax-credit provisions and provides more limited unemployment benefits.

Reid said House Majority Leader Steny Hoyer, a Maryland Democrat, assured him that “they will accept what we’ve talked about with first-time homebuyers.”

Insurance Tips for the Halloween Holiday for Homeowners

Insurance Tips for the Halloween Holiday for Homeowners

Although homeowners insurance is not usually the first thing that comes to mind at Halloween, it should be one of the items that is near the top of the Halloween list. The mere fact of the increased exposure (meaning a stream of people visiting the property), increases the possibility of a homeowners insurance claim.

Halloween Insurance Tips for Homeowners

Listed below are a few things a homeowner can do to reduce the risk of having to report a Halloween insurance claim.

1.Keep Fido out of the way. The constant ringing of the doorbell and the Halloween hustle and bustle gets dogs excited. The oddly dressed people on the other side of the door don't do much to calm Fido down. It's best to make sure that the dog is occupied or kept away from the door so that he does not feel the need to protect his turf or playfully jump on trick or treaters, knocking them to the floor. The last type of Halloween treat a homeowner wants is a liability suit because of the dog.

2.Practice extreme caution with candles. While the orange glowing effect of a candle adds to the Halloween ambiance, it can cause a fire if the candles are not carefully placed and monitored.

3.Illuminate walking paths for trick or treaters. It is possible to decorate a home for Halloween keeping with the dark and gloomy tradition while simultaneously providing enough light for the walking path. Whether the walkway is lined with glowing pumpkins or the muted illumination of solar lights, it is important for the homeowner to properly illuminate the walking path to avoid unnecessary trips and falls.

4.Keep all wiring off the walking path. Along with proper theme related lighting, homeowners must take care to keep the extension cords off the walkway or cover them with mats in such a way to prevent tripping and falling. Trips and falls are common causes for homeowner insurance third party liability claims.

5.Be careful of the 'shock and awe' affect. The Halloween celebration invokes thoughts of horror, fright and shock. However, in an attempt to reduce the possibility of a law suit, it is recommended to refrain from tactics such as suddenly jumping out from darkened bushes or other such scare tactics. These blood rushing tactics may be fun at an amusement park fun house, but it opens the homeowner up to another source of liability. Amusement parks carry Haunted House Insurance to cover such risks, homeowners do not.

6.Purchase additional coverage. If the thought of pulling in the reigns on a Halloween celebration puts a damper on the fun, maybe its time to consider purchasing additional insurance to cover the holiday. Homeowners can call their insurance agent to find out how much it will cost to increase their liability limits to cover the increased holiday exposure.

By taking just a few precautions, homeowners won't have to spend their time worrying about potential insurance claims. The only thing they should be concerned about is whether or not they have enough candy for the hungry little trick or treaters.

How To Request Your Credit Report

How To Request Your Credit Report

How To Request Your Credit ReportChecking your credit report regularly is a good move and can help protect you from identity theft, find and correct errors or unauthorized access. The Fair Credit Reporting Act guarantees you access to a free credit report from each of the three nationwide reporting agencies Experian, Equifax, and TransUnion every year. There are some other times you are entitled to your report for free such as, if you have been denied credit or insurance and your credit was a part of that decision; you are unemployed and plan to look for a job in the next 60 days; you are on welfare, or if you live in certain states (Connecticut is not one of them). You can always obtain your report by paying for it (currently no more than $10.50) from each of the bureaus at any time, but hey if it is free that is much better. Why spend money if you do not have to?
How to request your credit report, select in one of the three ways:

Online. Make sure that you visit AnnualCreditReport.com. It is the only authorized source of your free annual credit report. Do not be fooled by impostor sites, or come-on's like "FREE" this or that. You need to be prepared to confirm your identity, that will include the usual name/address/social security number as well as if you have a bill with this or that company and about what the monthly payment is. You also need to make sure you follow the onscreen prompts to make sure you end up back at the AnnualCreditReport.com site so you can request each of your three reports, it is not a one request get all three at one time set up.

By Phone. The phone number to call is 1-877-322-8228.

By Mail. Use this credit report request formto obtain credit report by mail. The link will open a pdf document in a new window. Print the form, complete and mail to: Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. The address will also be on the form.

The Federal Trade Commission has a a great website dedicated to obtaining your free annual credit report. Check it out, there is lots of great information there. They remind you anyone Anyone can write a catchy jingle, but only AnnualCreditReport.com provides you with a truly free credit report. AnnualCreditReport.comrequires no hidden fees or trial memberships.

How to request your credit report, there are 3 easy ways to make your request. Pick the option you feel most comfortable with and start protecting your identity, and fixing any errors that you may have on your report. A hint on adding identity theft protection, request one report at a time. Spread your requests out throughout the year (say Experian in February, Equifax in July and TransUnion in September) and be able to check your credit three times a year, not just once.

Twin Cities Housing Market: Hottest in the Nation?

Minneapolis-St. Paul area home prices rose 3.2 percent in August.It's the fourth straight month of improvement and second month in a row the Cities came out on top.

By KARA McGUIRE, Star Tribune

The Twin Cities area was one of the nation's warmer housing markets this summer as home prices rose faster here than in other metro areas, according to a closely watched housing index released Tuesday.

But market observers still warn that economic uncertainty could cause prices to start sinking again in a "double dip" scenario.

Minneapolis-St. Paul area home prices rose 3.2 percent from July to August, according to the Standard & Poor's/Case-Shiller national home price index, compared with a 1.2 percent average increase for the 20 cities tracked by the index. Only Cleveland failed to show an improvement in prices.

This is the fourth straight month of improvement for Minneapolis-St. Paul and the nation. It is also the second month in a row that the Twin Cities came out on top of the index; prices here rose 4.6 percent from June to July.

Still, home prices have a long way to go before recovering what they've lost. In this market, median home prices are still 13.7 percent below August 2008 levels. That is slightly worse than the 11.3 percent that prices are down nationwide.

The Minneapolis Area Association of Realtors reported the August median home price for the metro area was $175,000. Case-Shiller data show August prices in the Twin Cities area are about where they were in August 2001.

David Blitzer, chairman of the Index Committee at Standard & Poor's, said the Twin Cities may be on the top of the index for the second month in a row because the area's prices peaked and bottomed earlier than the other areas tracked.

The median price peaked in September 2006 at $229,000 and bottomed in April at $153,000.

"Plus, the run-up was not as wild as some places, so the recovery is probably easier," he explained in an e-mail.

Buying before winter

Chris Galler, chief operating officer for the Minnesota Association of Realtors, said he thinks area prices have risen faster because of the area's many cold months.

"Consumers are trying to get into houses before the winter comes," he said, adding he wouldn't be surprised to see prices fall in December and January.

The widely reported Case-Shiller numbers aren't seasonally adjusted. When taking seasonal variations into account, home prices here were up 2.3 percent in August, a slightly lower increase than San Francisco, and up 1.0 percent nationwide.

Housing experts such as Blitzer and Galler worry that prices may head south again if the unemployment rate continues to rise and the home buyer tax credit is not extended.

An extension seemed likely Tuesday afternoon as Senate leaders debated the details.

The credit could buoy home prices through the winter, especially if the credit expires before the housing market traditionally heats up in spring.

The Conference Board reported Tuesday that consumer confidence fell unexpectedly this month because of the unemployment picture. Home prices are tied to consumer confidence, because housing values make up a large percentage of net worth for many families.

Foreclosures still loom

Galler worries about a new wave of foreclosures hitting the market in 2010 due to failed loan modifications and more homeowners losing jobs. Foreclosures depress overall home prices, as homeowners hunt for deals.

"It's very difficult to see where we're not going to have foreclosures going forward," he said.

Data released today by Realty Trac, an online marketplace for foreclosed properties, show foreclosures rising faster locally than nationally. The Minneapolis-St. Paul metro area had 9,767 foreclosure filings in the third quarter, a 13.5 percent increase from the second quarter and nearly double the third-quarter total last year, Realty Trac said.

The report found one in every 136 Twin Cities area households received a foreclosure notice during that period, on par with the national figure.

It's that time of the year again to set them back!

It's that time of the year again to set them back! (Members Only) (edit/delete)
Time -- once again -- to fall back.

Daylight saving time ends at 2 a.m. Sunday, meaning clocks need to be turned back an hour.

If that seems a tad late in the year, well, it is.

In 2005, Congress passed an energy bill that included extending daylight saving time by about a month. Starting two years ago, the change starts the second Sunday of March and ends on the first Sunday of November.

Although the rationale for doing so was to save energy, the benefits -- and drawbacks -- of the time shift have been debated endlessly since it was first written into federal law in 1918.

Obviously, no daylight is actually saved by the shift, since the sun rises and sets independently of any mechanical clock.

The Monthly Skinny - October

Twin Cities Housing Outlook Video



provided by MAAR

Sometimes it's nice to sit back and reflect on life...

Watch below and let me know how this makes you feel....very moving!

Twin Cities Housing Supply Outlook - October

What to Watch For

Twin Cities Housing Supply Outlook

If you're buying a home in the price range below $120,000, you're gonna have to
move fast. There's only 2.9 months of supply in that range, which places it in the
extreme seller's market category. The reason for the tight inventory picture?
There's been a huge upsurge in home buying activity—sales are up 127.5
percent in that category over the last twelve months.

The number of new construction properties available for sale continues to shrink
rapidly as builders pull back from creating new inventory. The current inventory
of 2,426 listed new construction properties in the MLS system represents a drop
of over 1,200 units from a year ago.

Unfortunately for builders, new construction home sales have also rapidly
declined, falling by 18.8 percent (over 800 units) in the last twelve months

1.4 Million Families Have Taken Advantage of First-Time Home Buyer Tax Credit, More Claims Expected

RISMEDIA, October 8, 2009—With the First-Time Home Buyer Tax Credit deadline quickly approaching, the Internal Revenue Service recently reminded potential home buyers they must complete their first-time home purchases before Dec. 1, 2009 to qualify for the special first-time home buyer credit. The American Recovery and Reinvestment Act extended the tax credit, which has provided a tax benefit to more than 1.4 million taxpayers so far.
The credit of up to $8,000 is generally available to home buyers with qualifying income levels who have never owned a home or have not owned one in the past three years.

The IRS encouraged all eligible homebuyers to take advantage of the first-time home buyer credit but at the same time cautioned taxpayers to avoid schemes that help ineligible people file false claims for the credit. Currently, the agency is investigating a number of cases of potential fraud and is using computer screening tools to identify questionable claims for the credit.
Because the credit is only in effect for a limited time, those considering buying a home must act soon to qualify for the credit. Under the Recovery Act, an eligible home purchase must be completed before Dec. 1, 2009. This means that the last day to close on a home is Nov. 30.

The credit cannot be claimed until after the purchase is completed. For purchases made this year before Dec. 1, taxpayers have the option of claiming the credit on their 2008 returns or waiting until next year and claiming it on their 2009 returns.
For those considering a home purchase this fall, here are some other details about the first-time home buyer credit:

-The credit is 10% of the purchase price of the home, with a maximum available credit of $8,000 for either a single taxpayer or a married couple filing jointly. The limit is $4,000 for a married person filing a separate return. In most cases, the full credit will be available for homes costing $80,000 or more.

-The credit reduces the taxpayer’s tax bill or increases his or her refund, dollar for dollar. Unlike most tax credits, the first-time home buyer credit is fully refundable. This means that the credit will be paid to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.

-Only the purchase of a main home located in the United States qualifies. Vacation homes and rental properties are not eligible.

-A home constructed by the taxpayer only qualifies for the credit if the taxpayer occupies it before Dec. 1, 2009.

-The credit is reduced or eliminated for higher-income taxpayers. The credit is phased out based on the taxpayer’s modified adjusted gross income (MAGI). MAGI is adjusted gross income plus various amounts excluded from income—for example, certain foreign income. For a married couple filing a joint return, the phase-out range is $150,000 to $170,000. For other taxpayers, the range is $75,000 to $95,000. This means the full credit is available for married couples filing a joint return whose MAGI is $150,000 or less and for other taxpayers whose MAGI is $75,000 or less.

-The credit must be repaid if, within three years of purchase, the home ceases to be the taxpayer’s main home. For example, a taxpayer who claims the credit based on a qualifying purchase on Sept. 1, 2009, must repay the full credit if he or she sells the home or converts it to business or rental use at any time before Sept. 1, 2012.

Taxpayers cannot take advantage of the credit even if they buy a main home before Dec. 1 if:

-The taxpayer’s income is too large. This means joint filers with MAGI of $170,000 and above and other taxpayers with MAGI of $95,000 and above.

-The taxpayer buys a home from a close relative. This includes a home purchased from the taxpayer’s spouse, parent, grandparent, child or grandchild.

-The taxpayer owned another main home at any time during the three years prior to the date of purchase. For a married couple filing a joint return, this requirement applies to both spouses. For example, if the taxpayer bought a home on Sept. 1, 2009, the taxpayer cannot take the credit for that home if he or she owned, or had an ownership interest in, another main home at any time from Sept. 2, 2006, through Sept. 1, 2009.

-The taxpayer is a nonresident alien.

For more information, visit www.irs.gov.