Can a taxpayer claim the first-time homebuyer credit if the purchase is pursuant to a seller financing arrangement (for example, a contract for deed, installment land sale contract, or long-term land contract), and the seller retains legal title to secure the taxpayer's payment obligations?

If the taxpayer obtains the "benefits and burdens" of ownership of a residence in a seller financing arrangement, then the taxpayer can claim the credit even though the seller retains legal title. Factors that indicate that a taxpayer has the benefits and burdens of ownership include:

1. Right of possession,
2. Right to obtain legal title upon full payment of the purchase price
3. Right to construct improvements,
4. Obligation to pay property taxes,
5. Risk of loss,
6. Responsibility to insure the property, and
7. Duty to maintain the property

Seller financing arrangements can often provide many benefits to the purchaser, but please feel free to check with Churchill Mortgage to see if that option is the best program for you.  Contact one of our Home Loan Specialist at 1-888-562-6200 for more information.  Just make sure to have your purchase agreement signed by April 30, 2010 and the closing documents signed by June 30, 2010 to qualify for the tax credit.