After debate over the final dollar amount, the new economic stimulus bill will contain an $8,000 tax credit. First-time buyers can claim the credit worth $8,000 or 10% of the home's value, whichever is less either on their 2008 or 2009 taxes.
This credit will be refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of withholding they paid during the year plus anything extra they had to pay when they filed their returns - was less than that amount.
To qualify for the credit, potential home owners must have purchased January 1, 2009 or later and will have up until November 30, 2009 to close on their new home. Buyers may not have owned a home for the past three years to qualify as "first time" buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. Although higher-income buyers may receive a partial credit.
In addition, applying for the credit will be easy as home buyer will be able to just claim it on their return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
According to the National Association Realtors, the $8,000 credit will bring an additional 300,000 new homebuyers into the market between now and its expiration on November 30, 2008 which should somewhat improve the housing market.
In addition, a carryover effect may occur because each first-time homebuyer sale will lead to two more trade-up transactions down the line. As it will allow more existing sellers to sell their homes to potential first time buyers. The true impact is yet to be determined, but the credit is a step in the right direction to help further stimulate the housing market.

With signing of the American Recovery and Reinvestment Act of 2009 into law by President Obama, FHA loan limits have been reinstated to the loan limits of 2008. What this means is that Maricopa and Pinal will have their loan limits raised from the current level of $271,050 back to $346,250. This will help more homeowners be able to qualify for an FHA loan in 2009 for both the purchase and refinance of a home loan.
FHA financing still has some of the lowest down payment requirements of all loans at 3.5% for a purchase. While also allowing higher loan to values for borrowers looking to refinance their home. So this along with the recently amended $8,000 home buyer tax credit is good news for the housing market.