I'm a 45 year old divorced father of four. In January of 2006 I quit claimed all interest in the home my ex wife and I owned and lived in. Three and one half years later, I was debating whether to renew my annual lease on an affordable apartment in a convenient location. My landlord, a realtor, told me I'd be crazy NOT to take advantage of the new first time home buyer credit being offered.
I looked into it. I clearly qualified as a first time home buyer. I knew of a nice little house for sale in a neighborhood I liked. I didn't have much money for a down payment though. I heard of a local bank offering to lend downpayment money to borrowers qualifying for the first time home buyer credit. Everything was lining up! I got pre-qualified, made an offer, got it accepted, and scheduled a closing.
In June of 2009 I became a home owner. I paid $65,000 for the house. I borrowed the 10% downpayment in a balloon loan- to be paid when the tax credit came in 6 to 8 weeks. This may seem like the kind of borrowing that got the country into trouble, but the house appraised well above the purchase price, and with the $6500 credit, I'd be in a great equity position in no time!
Two months later I'd heard nothing from the IRS. I went online to check the status. It showed nothing. I called a toll-free number and was put on hold for twenty minutes! You never get those minutes of your life back!
Three months later I called again. I learned that the IRS was overwhelmed by applications for this first time home buyer credit. The Economic Stimulus was doing some stimulating. Things were backed up. The balloon loan came due. I extended it for another six weeks, (at 13%)
Four months later I got a letter from the IRS. My credit was denied. Their records showed that I'd owned a home within the three year period preceding the purchase of the qualifying home. Their records were wrong, but that didn't matter much. the letter was final. My only option, it stated, was to appeal in federal tax court!
What???? Once I settled down, I began researching. I found phone numbers that got me directly to IRS agents. (See the page: IRS contacts) I made calls and surprised a few bureaucrats. I also filled out a form to procure an IRS tax advocate. If you are having trouble getting your credit, click here to FILL OUT THIS FORM: !!
I got them to reopen my case. I called my advocate every week. I felt like, maybe she was helping- maybe she was pacifying be to get me off the phone.
Six months later, I closed out the year with a report from the IRS. The advocate had told me nothing of the report landing in my mail box- the report informing me that A. My First Time Home Buyer Credit was denied. B. A review of my 2008 tax filing revealed an underpayment of $1600.00!
Wow! Both items were in error. Try telling the IRS that!
I've since refinanced the balloon loan into a second mortgage. Now I'm paying two loans and property taxes, and utilities, AND maintenance! Thanks Obama. You dangled a carrot. I jumped from my affordable apartment. The carrot got yanked away and here I am. The irony of a first time home buyer home going into foreclosure is rich and tragic.
Have I quit fighting? No Way!
1. I contacted my U.S. Congressional representative. I encourage anyone having trouble of this sort to do the same. After signing a release of information, the office of my congressman will be advocating for me. A file stamped: CONGRESSIONAL INTEREST might just float to the top of the pile.
2. I submitted paper copies of all documentation directly to the agent who signed the report, along with a letter summarizing my situation and itemizing the documents included.
3. I submitted paper copies of all documentation directly to the taxpayer advocate assigned to my case. | 
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