Extension is Likely for the First Time Home-Buyer Tax Credit

With the deadline on the First Time Home-Buyer Tax Credit program looming just one month away, the Obama administration is backing an extension from the original date of November 30, 2009 until April 30, 2010. The program, which has been helpful in stimulating the housing market, offers first time home buyers a straight $8000 credit on their taxes. (Previous credits were more of a loan that required the buyer to repay the government). More than 1.2 million borrowers have claimed $8.5 billion of the $13.6 billion set aside for the homebuyer tax credits this year, according to the Treasury Department.

With so many buyers scrambling to close before November 30, many buyers face the possibility of losing out simply because underwriters are swamped and may not be able to deal with the demand in time. In addition, if a buyer has not yet begun the purchase process, it is unlikely they will make the deadline. The present discussion would extend the credit until April, but there are also new components up for review, like an addition credit of $6500 for home buyers who have lived in their prior homes for a minimum of 5 years and new increased income eligibility requirements, opening up the field of potential buyers considerably.

For more details about the current tax credit program, read our April 30, 2009 article (click here)