UPDATE (6/30/2010): The U.S. government has extended the closing deadline for the popular homebuyer tax credit from June 30, 2010 to Sept. 30, 2010. For homebuyers who met the April 30 deadline to have a home under contract, this extension would provide three additional months to close on purchases and take advantage of the valuable tax incentive.
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First time homebuyers aren't the only ones who can claim a tax credit when they purchase a home. Now current homeowners can take advantage of the tax break too, if they qualify.

President Barack Obama signed into law a $24 billion economic stimulus bill last fall, which included an extension and expansion of the popular first time homebuyer tax credit. It was set to expire on Nov. 30. Prospective buyers had until June 30, 2010, to close on their purchase (which was just extended) and will need to submit documentation with their tax returns to claim the credit. The new program is estimated to cost $11 billion. Here are the details:

FIRST TIME BUYERS

Credit: Equal to 10 percent of the home's purchase price, up to $8,000

Who Qualifies:

• Those who haven't owned property in the last three years
• Those with income up to $225,000 for couples and $125,000 for individuals (credit phases out for people who make more than these amounts)
• Must be at least 18 years of age to claim credit
• Purchase price must be $800,000 or less

Deadlines:

• Have until April 30, 2010, to enter into contract for a home purchase
• Have until Sept. 30, 2010, to close on the purchase

CURRENT HOMEOWNERS

Credit: Equal to 10 percent of the home's purchase price, up to $6,500

Who Qualifies:

• Those who have owned and lived in their principal residence for at least five consecutive years during the past eight years
• Those with income up to $225,000 for couples and $125,000 for individuals (credit phases out for people who make more than these amounts)
• Must be at least 18 years of age to claim credit
• Purchase price must be $800,000 or less

Deadlines:

• Have until April 30, 2010, to enter into contract for a home purchase
• Have until Sept. 30, 2010, to close on the purchase

In addition, buyers have another year to take advantage of the higher loan limit for mortgages backed by the Federal Housing Administration, Fannie Mae or Freddie Mac -- set at 125 percent of local median home sales prices, up to a maximum of $729,750 in high-cost housing markets. The limit in normal markets will remain $271,050 for FHA and $417,000 for Fannie Mae and Freddie Mac.

What this all means is that many more buyers qualify for a tax credit. So what are you waiting for? If you're even remotely considering buying a home, now's the time to do it. Don't let the first time buyers have all the fun.

For more tips and advice, visit FrontDoor's First-Time Homebuyer Guide.

More on FrontDoor:

• Top 10 Tax Tips
• Tips for Claiming the First Time Homebuyer's Tax Credit
• Foreclosure Buying Guide
• Pricing and Home Value Guide
• City Guides
• Tools and Calculators

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