Extension of First Time Home Buyer Credit Approved by Congress

filed under: Buyers posted on November 5th, 2009

Many of my clients this year have gotten $8,000 checks from the federal government shortly after purchasing their first homes. They have been able to pay closing costs (by borrowing money from a relative and repaying when the credit was paid to them) or do necessary repairs. In some cases it was enough of a difference to make it easier for them to accomplish the goal of buying their first homes. According to statistics only about 30% of people who took advantage of the credit were not going to buy otherwise but my clients specifically cited the credit as an incentive for them to buy this year, particularly in the more fearful market of the first half of 2009.

Now there is good news for others who might want to buy and even for people who want to sell their home and move up to a different one.

Just this afternoon both houses of Congress have approved an extension of the $8,000 first time homebuyer credit, and expanded it to include a $6,500 credit for move-up buyers who have been in their homes for at least five years. The bill will go to President Obama for his signature. Income limits have been raised to allow for more upper income buyers to participate fully and the credit will be available through April 30, 2010, and up to two months longer for homes in escrow as of April 30 of next year.

The expansion of the credit to existing homeowners is meant to spur sales activity in the critical move up market and may be enough of a push to get some sellers and buyers off the fence. In many markets the entry level homes are selling rapidly and prices have come up somewhat from the bottom. The mid-ranges have been slower. It will be interesting to see how this new aspect of the credit works for move-up buyers.

For more details and resources on who qualifiies and how you can take advantage of the credit, please contact me or visit the National Association of Realtor’s website for details and how-to’s.

posted by Pam Buda // 2 Comments »