Congress has tentatively agreed on an extension for the first time homebuyer tax credit. They are attaching it to a bill that extends unemployment benefits.
The Senate passed their version Wednesday and if the House accepts it this week, it will go to President Obama to sign into law. The credit is due to expire on November 30th but this would extend it until April 30, 2010. The purchase agreement would have to be written by April 30th and closed by the end of June.
The big news is if this is passed, it would also allow people that have owned a home for at least five years to get a credit of $6,500 on a new residence. Income limits for eligibility would also be raised, so more people would qualify. The new income limits would be increased to individuals with income up to $125,000 and couples earning up to $225,000. Under both House and Senate versions, there are smaller amounts available to people earning slighly higher incomes until the credit phases out.
There are several critics that don't want the credit extended claiming that most people would have bought homes anyway and that there are suspected criminal and civil abuses of the program. According to economists, there are 1.4 million claimants of the credit and less than a third are believed to have bought their home just because of the credit.
This has not been passed yet, but with it being attached to the unemployment extension, it does look very promising! I know it would help several clients that are waiting for purchase agreements to be accepted and worried that they won't be able to close before November 30th!!
