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I hope this is the best forum for this question, here goes.
My husband and I bought our house (in Lakeland, TN -- a suburb of Memphis that is also its own incorporated town) back in June 2010. We got under contract in April 2010, just in time to qualify for the tax credit. At the time, we planned to stay in this house for 7-10 years, gradually make improvements, etc. We paid $155k for the house, and at that time, houses in our neighborhood were going for $145k-$170k. We owe around $148k on the house (we had an FHA loan with the 3.5% down payment -- not ideal, but it is what it is at this point -- I'd do a lot of things differently with the knowledge I have now).
Long story very short, my husband got a new job last summer and we found out a couple of weeks ago that he's possibly getting a promotion...in Cincinnati, OH. Our first thought was "Uh oh, selling our house -- and oh no, the tax credit!"
Since the tax credit ended, the prices for houses in our neighborhood have dropped to around the $125k-145k range (and the $145k is for houses with more bedrooms/bathrooms than ours). We're prepared to take a loss on the house (though not excited about it), but if we sell the house for, let's say, $130k -- do we still have to repay the tax credit? I don't mind paying our obligations, since we made a deal with the government to get that money and now we're not holding up our end of the agreement, I just was curious how that was all calculated.
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