Tax Credit Extension-Signed by President Obama

To much anticipation and longing for further improvement in the mortgage and housing industry, the First Time Homebuyer Tax Credit will be extended today. The program, scheduled to expire at the end of November, will now require buyers to sign a purchase agreement by April 30, 2010 and close by June 30th. The FTHB Tax Credit Extension would include:


Buyers who have owned their current homes at least 5 years would be eligible for up to $6,500

First Time Homebuyers - or anyone who has not owned a home in the last 3 years would still be eligible for the $8000 Tax Credit

The credit is available for the purchase of principal homes costing $800,000 or less - vacation homes are ineligible

The credit would now be eligible to purchasers up to $125,000 in single income or $225,000 in joint income

The credit would be extended an additional year, until June 30, 2011 for members of the military serving outside the United States for at least 90 days

Extending the credit should allow more people to purchase a home and help stop the continued downward spiral in housing prices caused by the foreclosure crisis. The extension has been a priority to the real estate industry which says that the FTHB Tax Credit has been instrumental in the turn around of the market that was a major cause of the economic downturn.

The tax credit program will cost the government about $10.8 billion and the National Association of Realtors has estimated that out of the 1.4 million homebuyers that have already used the tax credit, about 350,000 would not have purchased their home without the tax credit.