Can someone qualify for the first time home buyer tax credit if their name is not on the mortgage?
by Mortgage Rates on Sunday, October 10th, 2010 | 5 Comments
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Property title (ownership, not borrower) determines the eligibility for the credit. If both of you are on the title, both of you must meet the criteria.
Actually that website JLF lists would seem to indicate that the credit can be allocated to any buyer who qualifies if the joint buyers are unmarried.
“However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer”
If accurate, it may be possible to do what you described. However, you must be very wary…you are essentially giving him an owership share without having any financial commitment to the mortgage. (It is possible your mortgage company and/or locality will not let someone not on the mortgage be added to the deed)
If you’re NOT married, and he is in title, he may qualify.
http://www.irs.gov form 5405
However putting him on title After your purchase would most likely VOID or accelerate your mortgage.
I don’t see how he is buying the home with you. Is he paying cash for half of it, and you are taking out a mortgage on the rest? He must be a purchaser, not just an owner.
If he obtains his ownership rights to the property through a gift from you, that does not qualify for the first-time homebuyer credit.
If you are the purchaser taking out a mortgage, the mortgage company will not allow another person to have ownership interest in the house. This is because if you default on the mortgage, the entire house may not be used to satisfy your debt.
Unless he has paid for part of the house and is a part-owner, he does not meet the qualifications as first-time homebuyer.
If he’s on the deed, he’d qualify. There doesn’t even have to BE a mortgage.
But be careful here. If his credit is too poor to qualify for a mortgage, is this someone you really want to buy a house with? And then, if you split up, end up paying the mortgage plus paying him for half of the house, since with his name on the deed he’ll own half of it.