There has been much confusion over the impending stop of the $8,000
first time home buyer tax credit. The tax credit is a bonus incentive
that was set to expire on December 1st 2009.
The tax credit allowed first time home buyers buying their primary residence with a florida mortgage company
to receive a tax credit of up to $8,000. With the demise of the program
many feared that house sales would declined and a market recovery would
be further delayed.
First word are that the Senate has not only agreed to an extension of
the first time home buyer tax credit, but an add on that would allow
current home owners to also be qualified for a tax credit on a new
house purchase as well even using Florida Hard Money
Sources within the Senate have given up that there is a tentative
agreement to lengthen the so called â€œfirst time home buyer tax creditâ€
until the end of April 2010. In addition they will expand the program
to include a tax credit of up to $6,500 for house purchasers that
already own a house. The senate sources hintedthat 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 owner occupied residence for the
last 5 years.
It appears they will want to attach this new home buyer tax credit
extension to the unemployment extension bill. Itâ€™s still unsure as to
when the extension will arise for a vote, but this first report is
incredibly positive news for the housing market.
A great number of families have already been able to purchase a owner
occupied home and take advantage of the first time home buyer tax
credit. This 5 month extension and expansion will allow several
thousands more to benefit from it as well.
One point of trouble for many potential owners is not being able to use
the tax credit early and use it as part of the down payment on their
home buy. While HUD has allowed the use of the tax credit as down
payment, mortgage lenders as we have seen so often, have not gotten on
board with it and widely not allow the use of the tax credit for down
payment. Third parties had been advancing borrowers funds to use as
down payment in some reported cases. This is still not widely accepted
by banks and borrowers have had to wait until tax time to receive their
If you have been in the time frame to purchase a house it appears you
will have until the end of April to get a Federal check to do it!