The Iowa Finance Authority’s REOHome Program can help hard-working Iowans purchase the home of their dreams! The unique new program offers up to $10,000 in down payment/closing cost assistance to qualified Iowans who are purchasing a home that is Real Estate Owned. (Real Estate Owned properties are in the possession of a lender as a result of foreclosure of forfeiture.)

 
Eligible Home Buyers:
•Household income is restricted to 80% area median income per county.
•Must be purchasing an Iowa, foreclosed property for primary residence.
•Must qualify for IFA’s FirstHome Program.
•Must participate in pre-closing home buyer education.
•Eligible home buyers may also use IFA’s FirstHome Plus Program, which can offer an additional $2,500 for down payment assistance/closing costs.
Eligible Property:
•Home buyers must purchase foreclosed property or one that is in imminent foreclosure process.
•Limited to one unit, residential property on five acres or less,
•The property must be the home buyer’s primary residence.
Other Details:
•At closing, a lien is placed on the home equal to the amount of the REOHome assistance. The amount of the lien is reduced by 20 percent each year that the home remains the borrower’s primary residence. After the five years, the lien is eliminated entirely.

To learn more contact Pat (515.577.6040) or Beth (515.537.9922)

1. The pending marriage scenario:

If a single person qualifies for the FTHB credit at the time he/she buys a home with someone that is not a FTHB and then later that year they marry each other, is the credit still allowed?

Eligibility for the FTHB credit is determined on the date of purchase. If a FTHB buys a house and then later marries taxpayer B, not a FTHB , the credit is allowable at the maximum credit.

2. The Cosigner scenario:

Taxpayer A is a single first time home buyer – Taxpayer B cosigns for A and does not qualify for the credit – but both names are on the mortgage – can Tax payer A claim the credit?

Yes. Taxpayer B is not a FTHB and cannot claim any portion of the credit, but A may claim the entire amount if the home was purchased as Tax payer as primary residence.

Just a side note on this one: Remember the Credit doesn’t apply if the buyer purchases the house from an immediate relative.

3. The community property scenario

If a husband and wife wanted to sell the home the wife owned when they got married and the husband had  not owned a home within the last 3 years, could he qualify as a FTHB for the credit even though the wife wouldn’t?

No. The purchase date determines whether a person is eligible for the FTHB credit. Since the wife had ownership in a principal residence within the last three years, neither can take the credit. IRS tax code requires that the taxpayer and the taxpayers spouse not have an ownership interest in a principal residence in the last 3 years. The husband can’t take the credit even if filing a separate return.

4. When will the buyer get their money?

If the return and the 5405 were filed electronically – the IRS rule of thumb is 10 days from the filing

5. Will they get the entire 8K?

Remember the credit will be applied against any tax liability. So if the taxpayer owes taxes – the amount owed would be subtracted from the 8K credit leaving the taxpayer with the difference in a refund – or 8K less in liability.

6. Can a buyer qualify using any lender?

Qualification is not tied to the lender – so technically yes you may use any lender. However, the credit eligibility can be tied to certain products such as bond funded programs that would not allow the credit.

7. What are the terms to file an amended return?

To file an amended return you can electronically file form 1040X. Form 1040x must be filed within 3 years from the date of your original return or within 2 years from the date you paid the tax, whichever is later.

8. How about – would a buyer be considered a FTHB if they owned a primary residence outside the US within the last 3 years?

Yes – property outside the US isn’t used against the qualifications.

9. If two unmarried people buy a house together – how do they determine how the credit will be applied?

IRS Notice 2009 – 12 outlines allocation methods for those not married.

10. If I claim the credit – and stop using my house a principal residence before the 36 months is up – do I have to pay the credit back – is it prorated?

The entire amount of the credit would be required to be paid back and is due at the time you file the income tax for the year in which you ceased usage as a principle residence.

11. I buy a primary residence and qualify for the credit – but decide to rent out two bedrooms and report rental income on a schedule E – will I still qualify for the credit as a principal residence?

Yes – if you meet all other FTHB criteria.