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First Time Buyer Tax Credit IRS Guidelines Refined For Co-Borrowers

When co-borrowing, who gets the $8,000?

$8,000 tax creditIRS eligibility guidelines for the $8,000 homebuyer tax credit are now refined when it comes to co-borrowers buying a property, according to Although some are the tax credit’s extension, it’s being hailed by others as a buyer stimulus.

Regardless of where you fall on the spectrum, you should know the basics of how it works. Below are the details according to NAR of how co-borrowers’ situations work out:

  • When unmarried individuals co-purchase a home and only one is eligible for the credit, the full $8,000 can be allocated to the eligible buyer.
  • When a homeowning parent co-signs for an adult child’s mortgage and both names are on the note, the first time buyer can qualify for the whole amount “under some circumstances.”
  • The parent doesn’t qualify for any portion of the first time buyer’s credit, but if the child hasn’t owned a home during the 3 years prior, he or she can be allocated the entire $8,000.

What have you learned about the tax credit that other agents should know? Are there any unique situations you’ve been in that other agents would benefit from learning about? Tell us what you’ve learned in the comments!

Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.



  1. Joe Loomer

    December 9, 2009 at 6:28 am

    I guess what I learned is that I had seriously underestimated the effect the credit had on our market. November sales of single family homes were up 60% over November 2008. A massive increase considering that boost only brought our market to -2% below 2008’s total sales numbers. Since most of November’s closings where on contracts written BEFORE the credit was extended – one has to believe there was a lot of last-minute scurrying by 1st timers to get in under the gun….

    Let’s see if the extension and expansion has the same effect on the rest of the winter market.

    Navy Chief, Navy Pride

    • Lani Rosales

      December 9, 2009 at 9:59 am

      Joe, some people feel like the extension granting has caused cynicism and a lack of giddyup in the market- people may now say “oh, they’ll extend it again, I’ll buy when I feel like it.” Are you finding that to be the case or not in your own market?

  2. Joe Loomer

    December 9, 2009 at 10:16 am

    Recently, Senator Johnny Isakson spoke at our board office. He was adamant that there will be no more extensions to the credit. He also was quite animated about the sole reason for the extension was to protect equity as we seem to begin to pull out of the recession – not to give 1st timers a leg up.

    I’ve been an opponent of the tax credit when wearing my citizen hat, and a proponent in my Realtor garb – but I can’t argue with the numbers here in our market. My SOI also seems somewhat energized about it and not too cynical….

    Navy Chief, Navy Pride

  3. Karen Goodman

    December 10, 2009 at 12:01 am

    Thanks for pointing this out. You just gave me a great idea for a post – how college students and their parents might take advantage of the 1st time buyer tax credit, plus links with homes and condos in walking distance to the schools.

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