In an effort to continue pushing the nation’s economy along the road to recovery, President Obama recently signed a bill that extends the first-time home buyer tax credit and expands the credit to include more buyers.
Previously, the $8,000 first time home buyers tax credit was set to expire on November 30, 2009 but has now been extended, uninterrupted through April 30, 2010. A second credit of up to $6,500 has been added allowing existing homeowners to “move-up” and take advantage of the incentive.
EXTENDED: First-time buyers who have not owned a home in the past three years are eligible for up to an $8,000 tax credit.
- Tax credit does not require repayment.
- Credit is available to couples with gross income of less than $225,000 and individuals making less than $125,000. Previously, the limit was $75,000 for individuals and $150,000 for couples.
- Buyers must secure a binding contract by April 30, allowing 60 days to close. Previously, the sale had to closed by the expiration date, now the purchase must be under contract by the expiration date and closed by June 30, 2010.
EXPANDED: Qualified homeowners who have lived in their current home for at least five of the past eight years are eligible for up to a $6,500 tax credit to buy a home, effective as of November 7, 2009.
- Tax credit does not require repayment.
- Credit is available to couples with gross income of less than $225,000 and individuals making less than $125,000.
- Credit is limited to homes priced $800,000 or less.
- Buyers must secure a binding contract by April 30, allowing 60 days to close.
The National Association of Realtors put together this chart outlining the tax credit changes. To download the PDF file, click on the image:
For more information about the tax credit, please consult with your Realtor, loan officer and/or tax advisor.
Related references:
Federal Housing Tax Credit website (lots of info, FAQs)
IRS – First Time Homebuyer Tax Credit
NAR – Tax credit basics
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November 21st, 2009 at 9:04 am
This is some of the biggest news we have had and I dont think the general public even knows. It is up to Realtors like us with blogs like ours to get the news out. YOU DONT HAVE TO BE A FIRST TIME HOME BUYER TO GET THE NEW CREDIT!
Anyways thanks for helping get the word out.
November 22nd, 2009 at 6:35 pm
Since the announcemnt of the extension of the tax credit, I have seen an influx of potential buyers come to the table! Hopefully it keeps up!
November 23rd, 2009 at 7:31 pm
The credit is great, however in our market in Bergen County New Jersey; we are high end and need jumbo’s. They are available, but without securitizing it is still much harder than conventional or FHA. With government owning Fannie and Freddie it is government back all the way. Except Jumbo’s are not in that league.
If there were jumbo’s as easily gotten as the gov backed loans we would be rolling in the upper markets.
December 7th, 2009 at 10:46 pm
It’s kind of interesting, but in my area we’re actually seeing a lot more listings right now. Home Owners that want to take advantage of the extended tax credit now need to sell… Not sure if this is what we need right now, more home son the market….
December 13th, 2009 at 10:37 pm
I still can’t decide if this is a good idea or not. On the surface it seems great, but could we be getting your homeowners that don’t know what they are doing when it comes to loans, and those who may have unsteady income. If this is the case we could just start repeating the process that got us into this mess in the first place.
December 15th, 2009 at 12:08 pm
What if you put in contract in mid-Nov, and close in Jan? Does that mean that the new credit can be applied?
December 15th, 2009 at 1:19 pm
@Interested – yes, the new tax credit criteria would apply.
January 8th, 2010 at 10:49 pm
I’m calling this the “Winter Tax Credit”. I fBuyers wait untill Spring to start looking, it will be too late.