$7,500.00 tax credit

I was listening to the radio the other day and someone brought up the "Housing Stimulus Package". They were buying there first house and were wondering if they should apply for it. Whenever I see these programs, I always wonder if it is worth the hassle of going through the paper work to get the credit, because as you probably know you eventually have to pay back the $7,500.00 if you take it from the government.

So.... being the numbers guy that I am, I just wanted to see what the value would be on the interest free loan for the next 15 yrs. So here are your story problems for the day.

"LOAN" from the Government:
Loan: $7,500.00
Term: 15 yrs
Interest: 0.00%
Payment: $500.00 yrly payment
TOTAL COST IN INTEREST: $0.00

Now assume that you would have to borrow the same from a lending institution.

"LOAN" from the bank:
Loan: $7,500.00
Term: 15 yrs
Interest: 6.25%
Payment: $64.31 mnthly payment (bank would require a mnthly payment)
TOTAL COST: $11,575.21 LESS LOAN: $7,500.00
TOTAL COST IN INTEREST: $4,075.21

So the way I look at it, I would be making about $4,000.00 over the next 15 yrs for doing nothing other than buying a new home and using the Government Program. Sounds like a good idea to me.

For the record, don't use my calculations as the gospel.... you never know when my early morning calculations might be slightly off. I would consult your accountant for exact numbers if you are planning to apply for this program. If you want more information I have a link in my recommended sights to see or you can go to www.federalhousingtaxcredit.com