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Senate Continues Home Acquisition Tax Credit

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 “first time home buyer tax credit” 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. It’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 credit.

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!

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