First Time Home Buyers Incentive Could Work For Investors Too
Many investors already own their own houses, and the $8,000 credit was designed for people who are either buying their very first home, or they haven’t owned one in three years. But investors should be aware of a couple of recent wrinkles in the tax credit rules that they can put to good use themselves.
The IRS has interpreted the law to allow unmarried co-purchasers, including investors — to buy one-to-four unit properties with the credit flowing to a co-purchaser who qualifies for the credit, and will live in one unit, while the other units are rented out. And the credit itself has just become more attractive for buyers using FHA financing. The Federal Housing Administration has issued new guidance to lenders allowing them to “monetize” the credit and advance cash to first-time purchasers for closing fees and other expenses, including interest rate buydowns.
