First Time Home Buyer Tax Credit Extension into April 2010 Passes in Senate

Posted on | November 5, 2009 | 11 Comments

At Subprime Blogger we have been on top of the first time home buyer tax credit extension since the beginning of October; now we are finally getting close to the point in which the bill very close to President Obama’s desk. As of Wednesday November 4, 2009 the Senate has officially passed both unemployment benefit extensions as well as the extension of the first time home buyer tax credit. The bill will now move into the House, and then to President Obama’s desk for a signature.

The unemployment aspect of the bill has passed an additional 20 weeks of unemployment benefits to residents of over 24 states with the highest unemployment rates and an additional 14 weeks of benefits in other states who’s unemployment is not as high.

In addition to unemployment then Senate has passed a 6 months extension on the first time home buyer tax credit of $8,000. Hopefully this extension will encourage more people to buy homes and help the housing industry bounce back quicker.

For the first time home buyer tax credit there is an $800,000 maximum for the purchase price of the home, and 2 income caps which have been set. First, if the couple makes a joint income of $225,000 or higher they will not be eligible for the first time buyer credit, and if an individual makes an income of $125,000 or higher they will not be eligible for the credit. This bill is said to be one in a series of bills which the democrats are proposing in order to boost the economy, and hopefully end the current recession.

While this bill did pass, it has undoubtedly faced a great amount of opposition from politicians and citizens alike. This bill is going to cost $10 billion just for the home buyer tax credit, and nearing the trillions to support the amount of unemployment benefits that will need to be paid. With the current deficit both politicians and citizens know that as a country we cannot afford this bill. However, in order for our economy to have any hope of restoration it is necessary.

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Author: Sylvia Wayne

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Comments

11 Responses to “First Time Home Buyer Tax Credit Extension into April 2010 Passes in Senate”

Andy
November 5th, 2009 @ 6:43 am

Retailers and Realtors will have a smile today as most of these funds will be indirectly going to them over the next few months. This bill should fly through the house with more stimulus to come.
Rick Swindell
November 5th, 2009 @ 7:24 am

This is great news, especially in Arizona where we have a ton of lender owned inventory that this tax credit has been helping absorb. Thanks for the awesome and timely post!
Darrell
November 5th, 2009 @ 7:26 am

Great news! I purposely held off buying a home because i didn’t want to be rushed into it ans second, i felt the tax credit would be extended.
No New Stimulus
November 5th, 2009 @ 7:42 am

“With the current deficit both politicians and citizens know that as a country we cannot afford this bill. However, in order for our economy to have any hope of restoration it is necessary.”

What? No, really, did you just say we can’t afford it, but it is necessary? Rofl. I feel bad for all the real estate agents and mortgage brokers…THAT GOT FANTASTICALLY RICH DOING ABSOLUTELY NOTHING VALUE ADDED FOR THE ECONOMY who are struggling as the housing market blew up and they can’t find a different line of work because it took the rest of the economy with it.

Extend the unemployment benefits, absolutely. But forking over my tax dollars to a very narrow group of people, STOP. Even though I don’t like it, for first time buyers, I suppose I can look the other way. But this new extension will include move up buyers. MOVE UP BUYERS? This blows my mind. Someone that has lived in their home for 5 years, has been afording the payments for five years, DOESN’T NEED A TAX SUBSIDY. It’s a give away. And why 5 years? I had to take a ~$13000 loss ($7 from equity and $6 for commission) on a home I bought two years ago because I was laid off from a bankrupt company and had to move to find work. IF WE’RE GOING TO BE GIVING AWAY MONEY, WHY DON’T I GET A SLICE OF THIS SINCE I HAVE ABSOLUTELY BEEN MORE AFFECTED BY THIS CRISIS THAN SOMEONE WHO IS LOOKING TO UPGRADE THEIR LIFE. THIS IS INFURIATING.
A new view
November 5th, 2009 @ 8:36 am

I’m actually hoping that the tax credit for ‘move up buyers’ will encourage people who have lived in their house for 5 years, but possibly due to a job loss or other misfortune from the tough economy and may not be able to afford their payments any longer will consider actually moving down and use this tax credit as a reason to be able to sell their home for a bit less to get out without going into foreclosure. I wish the government would spin it this way, as well.
curious
November 5th, 2009 @ 8:49 am

does anyone know if this will be retroactive for the non-first time homebuyers? we just bought in March and our purchasers got a credit, but obviously we didn’t
No New Stimulus
November 5th, 2009 @ 8:51 am

At some point, I read they were requiring a move up in price, but it looks like that has been dropped. I can’t imagine there are many people interested in moving down where a mere 6,500 is going to make a huge difference for them. If they are in a situation where they need to sell but they can afford to purchase a new place (to get the credit), they aren’t going to risk going into foreclosure. If they are still looking to pay a mortgage, 6,500 on a move down sell isn’t going to be the difference maker that triggers them. It’s just a giveaway to a group of people that don’t need the help.
Andrew
November 5th, 2009 @ 1:12 pm

By STEPHEN OHLEMACHER, Associated Press Writer Stephen Ohlemacher, Associated Press Writer – 13 mins ago

WASHINGTON – Buying a home is about to get cheaper for a whole new crop of homebuyers — $6,500 cheaper.

First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package enacted earlier this year. But with the program scheduled to expire at the end of November, the House voted 403-12 Thursday to extend and expand the tax credit to include many buyers who already own homes. The Senate approved the measure Wednesday, and the White House said President Barack Obama would sign it Friday.
Congress Votes to Approve Homebuyer Credit Extension | Portland Real Estate Blog
November 5th, 2009 @ 2:14 pm

[...] has a good article here, Examiner.com here, and subprime blogger here regarding the passage of the revised credit and additional [...]
John
November 5th, 2009 @ 2:43 pm

So does this mean if it is extended and I just closed in October and make 100K that I will now get the full 8K credit or only if you close between Dec and June?
Mike G
November 6th, 2009 @ 4:32 am

Congratulations. We’ve extended the misery by another year. This economy won’t recover until we get the housing situation settled. That means prices fall to below historic norms to become truly affordable. With inflation here for food and energy already and coming for everything else (except real estate) Americans who are still fully employed cannot afford to pay 40%+ of their income on housing.

This credit creates false incentives and will keep prices higher than they should be and create inflation.

Honestly people the bubble was the issue not the bursting of the bubble. Think of it as a tumor. The bubble (inflated house prices, too much debt, no savings) was the tumor. The recession was the cure. Sure, chemo, radiation, surgery, or a combination aren’t pleasant, but they are needed to get rid of the tumor and get healthy again.

We need the recession to do what it needs to do to get us healthy again.

All we are celebrating is stopping treatment for a tumor and letting it grow back. Sure, it may help with the side effects, but it will kill us in the long run.