There has been much contention over the impending expiration of the $8,000 first time home buyer tax credit. The tax credit is a stimulus incentive that was set to expire on December 1st 2009.
The tax credit allowed first time home buyers purchasing their primary residence to receive a tax credit of up to $8,000. With the expiration of the program many feared that home sales would declined and a market recovery would be further delayed.
Initial reports are that the Senate has not only approved an extension of the first time home buyer tax credit, but an expansion that would allow current home owners to also be eligible for a tax credit on a new home UTAH home purchase as well!
Sources within the Senate have indicated that there is a preliminary agreement to extend the so called “first time home buyer tax credit” until the end of April 2010. In addition they intend to expand the program to include a tax credit of up to $6,500 for home buyers that already own a home. The senate sources indicated that one requirement on current homeowners looking to buy a new home and get the $6,500 credit is that they must have lived in their primary residence for the last five years.
It appears they will attempt to attach this new home buyer tax credit extension to the unemployment extension bill. It’s still unclear as to when the extension will come up for a vote, but this initial report is incredibly positive news for the housing market.
Thousands of families have already been able to purchase a home and take advantage of the first time home buyer tax credit. This five month extension and expansion will allow countless thousands more to take advantage of it as well.
One point of frustration for many home owners is not being able to access the tax credit early and use it as part of the down payment on their purchase. While HUD has approved the use of the tax credit as down payment, lenders as we have seen all too often, have not gotten on board with it and widely ban the use of the tax credit for down payment. Third parties had been advancing borrowers money to use as down payment in some reported cases. This is still not widely accepted by lenders and borrowers have had to wait until tax time to receive their credit.
If you have been in the market to buy a home it looks like you will have until the end of April to get a Government check to do so!