Your #1 Source of Tax Credit

Click on the map below to start your foreclosures search

The goal behind the credit

The Act was passed, as it was deemed helpful for individuals as well as communities that have seen the adverse effects of the foreclosures. It was also an attempt to avoid the happening of foreclosures in the future. Under the act, funds will be provided for the pre-foreclosure counseling sessions. Again, the bankruptcy code will be modified to incorporate the nontraditional as well as sub-prime mortgages. Again, the areas or communities with high foreclosure rates will be given funds to purchase the foreclosed properties. The properties have to be rehabilitated, rented out or resold. The main aim behind issuing the foreclosure credit act is to help move the foreclosed properties out of the market by encouraging the homebuyers to purchase them.

Benefits for homebuyers

For the buyers, the act is full of benefits. First of all, it will give them a tax credit of $7,000. This credit is going to be equally divided between the two years after the purchase of the foreclosed home. For married couples, who choose to file separately, the credit will be divided as $3,500 for each person. The credit is only available, if the homebuyer purchases the property as a principle residence. This means that the hardcore investors will have to use the home as permanent residence for a period of 24 months after they buy that home. Only then, will they get the full credit worth $7,000 credit. If the investor wants to sell the property or do not use it as a principal residence, at any time during the stated period of 24 months, the remaining portion of their tax credit will be disallowed.

Positive effect on the market

The act will affect the real estate market positively. Since the foreclosures tend to drag down the values of the other homes located in the vicinity, this incentive of tax credit foreclosures will attract buyers to purchase more and more foreclosed properties. This, in turn, will act as a positive factor in raising the values of the other homes located in the area. Therefore, any investors in the market, who have seen their properties devalued by foreclosures, will also be benefited.