A million people really got low interest loan rather than homebuyer tax credits

The government offered a homebuyer tax incentive, which helped to prop up a dismal housing industry for a when. The way it worked was that a person that bought a home could get a little fast money from Uncle Sam as a gift for doing their part in stimulating recovery, under certain conditions. A fair portion of those individuals will have to repay that credit back, as the original tax incentive offered for a purchase of a home was no credit; those refunds were essentially a low interest rate financial loans.

Washington provides a little fast cash

The recession took a huge toll on numerous industries. One of the hardest hit was the housing industry. Available home finances financial loans and capital dried up, prices and value went into freefall and foreclosures skyrocketed. Almost right away, part of the first stimulus plan programs was a home-buyer tax incentive. In 2008, the first year of the program, the least of $ 7,500 or 10 percent of the purchase price could possibly be deducted for getting a home. The deduction was changed to a refund in 2009, when the program was extended. As outlined by CNN, the catch is that the deduction is not actually a deduction or a credit. It was a loan.

The Internal Revenue Service wants its money in 15 years

There is a 15 year window for the loan to be repaid. There are lots of people who the Internal Revenue Service would like to collect the low cost loans from. There are approximately 950,000 individuals who owe the Internal Revenue Service. That said, the Internal Revenue Service is looking into things. The organizations does not know who exactly does and does not owe them. A fair amount of these individuals are now dead, which is one of the discrepancies the IRS is looking into. There were 1,326 people who filed for the tax incentive that are actually dead, and 500 of them have been tossed out.

Little activity permanently sparked by stimulus plan

Since stimulus plan programs were initially proposed, there has been questions over what good the programs would do. It is totally appropriate to do this, too. The mortgage modification program from the government is less than 50 percent effective. However, that is not one of the most frustrating aspects. It begs the question if anybody would have bought a house if they had known the tax credit had to be paid back.

Additional reading

money.cnn.com/2010/09/09/real_estate/who_repays_tax_credit/index.htm