San Jose-Sunnyvale-Santa Clara Mortgage Blog

In the final state of the state address of his gubernatorial career, California Gov. Arnold Schwarzenegger proposed a second round of $10,000 first time home buyer tax credit. The previous tax credit depleted eight months before the deadline after benefiting almost 10,700 California home buyers. The Franchise Tax Board stopped taking new applications at the start of July, 2009.

What this means is if this proposal is indeed passed California First Time Home Buyers can potentially get $18,000 in Tax credits. There is a Federal Tax Credit of $8000 + the new proposed $10000 California First Time Home Buyer tax Credit.

Tax credit proposal if passed will have following highlights:

• The Governor plans to set aside $200 million, twice the amount set aside last year. The credit will be offered on a first come first served basis till the fund is exhausted.
• The tax credit will apply to buyers of new & existing homes. The last credit was only applicable to new homes.
• The tax credit will be available only to first time home buyers.
• The tax credit will be $10,000 or 5% of the purchase price whichever is lower.

Combined with historical low interest rates and 30%-40% dip in property prices, this could be once in a lifetime opportunity for a First Time Home Buyer to buy a home in California.

If you were considering buying your first home, contact me at 408.905.6261 or shashank@arcuslending.com and I will be glad to help you with your financing needs.