For the prospective homebuyers out there who are unable to take advantage of the homebuyer tax credit because they cannot secure financing from a lender, there is a solution: the land contract.

An individual or married couple, who is otherwise qualified for the homebuyer tax credit, but is unable to obtain financing from a bank, can take advantage of the New Homebuyer Tax Credit by using a land installment contract.  Land installment contracts, also known as land contracts, are a method of purchasing property whereby the seller of the property provides the financing. 

Instead of a buyer making payments to a bank on the loan he used to purchase the property, the payments are made directly to the seller.  The buyer makes the down payment and monthly payments to the seller as the buyer would to a bank and upon completion of the payments, the title to the property is transferred to the buyer. 

For more information on the qualifications for the homebuyer tax credit, as well as the procedure for obtaining it, see the previous Ritter & Randolph blogs “Homebuyer’s Tax Credit Extended” and “How to Obtain Your $8,000 First-time Homebuyer Tax Credit“.  The attorneys and staff at Ritter & Randolph, LLC are experienced in preparing land contracts, as well as representing and addressing the tax needs of their clients.