There is just one month left in which to qualify for the $8,000 first time home buyer tax credit. This fact has people all over scrabbling to get into a home. While finding your dream home is fairly easy thanks to the abundance of homes on the market, getting a mortgage is another story all together!
Tightening lending guidelines have left many people unable to get a home loan. Most people believe that this means that they will just have to give up hope of qualifying for the tax credit. The truth is that there is another option. While most traditional rent to own contracts will not qualify you for the tax credit, a properly structured contract will!
In order to qualify for the first time home buyer tax credit, the transaction must be a bona fide sale under the IRS guidelines. This means that the contract will need to be structured more like an owner financed transaction. Still, there are stipulations that can be put in place to protect the current home owner, which can make them much more likely to agree to this structure. By offering them these protections, you can get most any home owner who is offering their home as a rent to own homes listing to agree to owner financing.
What are the advantages for you? With the proper contract structure, not only can you qualify for the federal $8,000 tax credit, you may also be able to write of a portion of your monthly payment on your taxes. (Of course, you should always seek the advice of a tax professional before you do anything!) Additionally, you can qualify for home owners insurance, which can be much easier and more affordable than strictly renters insurance.
If you are trying to buy a home but can’t get a mortgage, don’t give up hope! A properly structured owner financing contract can help you realize your dreams!