On July 2, 2010, President Obama signed the Homebuyer Assistance and Improvement Act of 2010 (H.R. 5623). The bill permits first-time homebuyers to qualify for the $8,000 credit. It also allows homeowners who have lived for five years in their current residence to purchase a new home and receive a credit of $6,500. In both cases, the buyers must have signed a contract for purchase by April 30.
Following the signature by the President, the IRS published a letter with explanations on how to claim the credit (IR-2010-80). New homeowners will file Form 5405, First-Time Homebuyer Credit and Repayment of the Credit. With this form the new purchaser should submit a copy of the settlement statement, normally Form HUD 1, Settlement Statement. For mobile home purchasers, include a copy of the retail sales contract.
Those existing home buyers who buy a new residence should include Form 1098, Mortgage Interest Statement for the past five years to show their ownership. Further information on claiming the homebuyer credit is available on www.irs.gov.
