How to Apply For or Reserve Your California First Time Buyer and New Home Credit

As of May 1, 2010 the frenzy for California’s First Time Buyer and New Home Credit began. This is first come, first serve territory, so you’d better get your applications and reservations in quickly.

Everyone has been anticipating the credit, now it comes down to following guidelines, filling in the paperwork correctly, having the appropriate items and then faxing to the correct number where your paperwork will receive a time and date stamp on a first come first serve basis. You will then wait approximately 4 months for your official answer from the Franchise Tax Board.

The FTB said “we must build a new computer system before we begin verifying the applications and reservation requests.”

Okay, after that shocking revelation, let’s get down to business. Here’s how to apply for your First Time Buyer tax credit:

Apply

Within two weeks (14 calendar days) after the close of escrow:

1. The seller must complete Parts II, III, and also Part IV (if the home has never been occupied) of Form 3549-A, Application for New Home / First-Time Buyer Credit, and provide a copy to the buyer or escrow person.
2. The buyer will complete Parts I, V & VI of Form 3549-A.
3. Fax the completed Form 3549-A and the final settlement statement (generally the buyer’s HUD-1 statement) to FTB at 916.855.5577.

• Fax is the only delivery method as the date and time stamp on the fax will determine the order in which credits are allocated.
• Fax only one completed application per residence with all qualified buyers listed.
• Do not fax the application to FTB before escrow closes.
• The buyer keeps a copy of the completed Form 3549-A for their records.
• Use the online fillable Form 3549-A. Simply fill in all required information, print the form, and sign.

Reservation Requests

Reserving your tax credit on a new home in California has some specific criteria that you must follow in order to be eligible.

The FTB  will accept reservation requests for the New Home Credit by fax only beginning May 1, 2010.

If a buyer wishes to request a reservation, before the close of escrow:

1. The seller must complete Parts I, II, & III of Form 3549-RR, Reservation Request for New Home Credit.
2. The buyer completes Parts IV & V.
3. Fax the completed Form 3549-RR and the required pages of the purchase agreement to FTB at 916.855.5577. If escrow has opened, it is best for the escrow person, on behalf of the buyer and seller, to fax the completed Form 3549-RR and the required pages of the purchase agreement to FTB and provide a copy to the buyer. If escrow has not opened, the buyer may fax it to FTB. (The buyer retains ultimate responsibility to ensure the completed reservation request and the required pages of the purchase agreement are submitted timely to the FTB.)
4. Do not fax the entire purchase agreement. Only fax the pages which show:
   1. Property address
   2. Buyer’s name
   3. Seller’s name
   4. Purchase price
   5. Deposit amount
   6. Buyer’s signature
   7. Seller’s signature

• Fax is the only delivery method as the date and time stamp on the fax will determine the order in which credits are reserved.
• Fax only one completed reservation request per residence with all qualified buyers listed.
• Do not fax the reservation request if the contract was entered into before May 1, 2010.
• Do not fax the reservation request to FTB after escrow closes or with the application (Form 3549-A).
• The buyer keeps a copy of the completed Form 3549-RR for their records.
• Use the online fillable Form 3549-RR. Simply fill in all required information, print the form, and sign.

Also, visit the FAQ – California Tax Credit often to see all the scenarios and comments posted by real people like you and me.

Related Articles:

2010 CA Tax Credit Guidelines