00 First Time Home Buyer Tax Credit Does Not Restrict Seller Financing
Q: I read your questions and answers column about the home-buying tax credit in the Sunday edition. Here is yet another question concerning that subject. Can first-time home buyers qualify for the tax credit if they buy from an individual seller who is holding the mortgage and the seller did not live in the home previously?
A: The home buyer tax credit doesn’t have anything to do with a home seller. Whether the seller lived in the property or rented it out doesn’t affect a buyer’s ability to claim the tax credit.
If you otherwise would qualify for the $8,000 first time home buyer credit or the $6,500 repeat home buyer tax credit, you should be fine buying this home even if the seller gives you financing to buy the home.
All that matters is that the home buyer is going to live in the home as a primary residence, is not buying the home from a close relative and meets the other means testing (such as the family income and the price of the property).
If you lived in your home for five consecutive years over the past eight years, you may qualify for the $6,500 home buyer tax credit. Find out more at IRS.gov.