First-time Homebuyers
- Tax credit up to $8,000
- Deadline extended until April 30, 2010. Plus, if a contract is signed before May 1, 2010 there will be 60 days to close on the home.
- Buyers that have not owned a home in the last 3 years.
- Purchases in 2010 can be claimed on 2009 tax return.
- Income limits increased to $125,000 on a single return and $225,000 on a joint return, up from $75,000 & $150,000.
Step-up Buyers
- Tax credit up to $6,500
- Purchases between December 1, 2009 and May 1, 2010. The same opportunity to close within 60 days applies.
- Buyers that have owned the same home for 5 consecutive of the last 8 years.
- Purchases in 2010 can be claimed on 2009 tax return.
Income limits are also $125,000 on a single return and $225,000 on a joint return.
Good news! Senators in Congress just agreed on Wednesday to extend the tax credit thru 2010. First-time homebuyers will get up to $8000 in tax credit and give up to $6000 in reduced credit to repeat homebuyers who have been in their homes for at least 5 years. The tax credits would be available to buyers who sign purchase agreements by April 30th, and would need to close on their homes by the end of June according to legislation being circulated amongst Congress.
The National Association of Realtors’ V.P. Ron Phipps stated one of the most important ways for consumers to see a bright future in terms of the economy is for Congress to extend the $8000 home-buyers tax credit. The tax credit has already made an impact as home sales have increased an estimated 5.1 million for the year. Housing inventory has slowed down helping to stabilize house prices. Since the momentum takes awhile, there’s not a better time to build on that by the extension of the tax credit through next year.
The present tax credit is set to expire on November 30th. Those who are in contract now may not be able to take advantage of the credit and close by that time. A few other things that Philips is pushing for is to make the FHA, Fannie Mae and Freddie Mac limits permanent that were established for this year, keep the governments continued involvement in the secondary mortgage market, discuss the Home Valuation Code of Conduct’s side effects that are slowing down sales, and give incentives and uniform procedures for short-sales.
Tougher Federal Housing Administration standards and low investor interest in the Housing Tax Credit program has stalled construction of affordable housing according to an article from Jamie Hopkins of the Baltimore Sun. It’s still difficult to get potential home-buyers financing.
“This is a national tragedy,” said Judith A. Kennedy, president and chief executive of the National Association of Affordable Housing Lenders.
Community development leaders and Affordable Housing partners have been lobbying Congress to change tax rules. At one time everyone was able to qualify for a loan whether they qualified or not and now the consumers in the middle are the one’s being turned down and the most affected.
