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First Time Homebuyer Tax Credit Extension (HR 3842)
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Representative Kurt Schrader, Democrat from Oregon, and Representative Steve Driehaus, Democrat from Ohio, have co-sponsored a bill, H.R. 3842, that would amend the Internal Revenue Code of 1986 to extend the first time homebuyer tax credit.
The current first time homebuyer credit is set to expire on December 1st, 2009. Schrader’s bill would do two crucial things:
- The program would be extended to October 1st, 2010,
- Homes purchased “after 2008,” rather than “in 2009″ would be elivible.
There is also one other change, you could treat the purchase of a home after December 31st, 2009 and before October 1st, 2010 as occurring on December 31st, 2009 for tax purposes. In other words, if you bought the house in 2010, you could take the credit on your 2009 tax return.
Don’t get too excited just yet, the bill was introduced on the 15th and was referred to the Committee on Ways and Means. Several bills just like this one have been introduced over the last few months and died in the Committee on Ways and Means (HR 1993, HR 2606, HR 2655, HR 2905… the list keeps going).
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I think all of these tax credits have to be taken seriously, but carefully. Congress wants to spend trillions on healthcare and the war, but giving massive tax credits leave Congress in the red. this is obviously good for homebuyers though.
Probably wrong of me, but I do not want it extended now that I have successfully taken advantage of it for my own means =P
Probably wrong of me… but I think you are a selfish person if you take advantage of something like this and then don’t support other people getting the same opportunity that you did.
Well, not to say that extending this is good or bad, but KingAsa, you’re off target here:
Everyone had the same opportunity that Brandon had. If I had to guess, I’d say you’re upset about the missed opportunity because others may not have been in a situation (like Brandon) to take advantage of that opportunity.
However, that criticism applies to any program with an end date. I think we can all agree that many of these stimulus programs need to end eventually even if we disagree about when that should be.
KingAsa, what would you say to someone who was not able to take advantage of the credit before next October? What about 3 years from now? 10 years?
I think it is proper for these programs to end at some point because their purpose is clearly to prevent more damage from being done to the real estate market. Housing seems to have leveled off, but that is obviously and substantially open to interpretation. If the housing market has been prevented from an even more devestating collapse, then it may be time to end or limit the program. Maybe it could be renewed but only for lower income levels? Who knows =)
I think that it should be extended because for the simple fact that we have been trying to take advantage of it since may, and still don not have a house, because the stupid banks want to turn this into bidding wars and drag it on. Especially in my case where I am using a VA loan, banks dont want to deal with something that will not get them any money up front, even though it is my right and I think I earned the right to use it defending my country, and them you have banks such as B OF A that wont even touch a VA loan just because they dont getn any money from me up front. So yeah it should be extended for those uf us that have been trying to take advantage…
I agree, why shouldn’t other people have the same advantage as you.
I think this would be great there is so many homes out there that need a family. Even though they say the ecomomy is getting better I dont think we are all the way there yet and this would definitly help. I think it is a great idea to extend it.
Definetly buyers do benefit as much as the sellers, America is going into foreclosure and it’s a quick fix to sell these homes. The extension is necessary because not everyone has had the opportunity to take advantage of this opportunity, because there are steps to take in order to qualify for these loans. President Obama is definetly helping Americans to live better.
This would really suck for those of us who don’t qualify for it. Everyone else gets 8k to use to outbid me.
Tex, I don’t know if you really understand how the program works. I have urgently been trying to purchase a house for at least a year and my mother in law is a real estate agent. She has been finding out from others buyers that if you are able to qualify for the credit, you don’t get that money until between 4-6 weeks AFTER you submit the paperwork to claim it. Which means that you have to close on the house before you can even file for it. So the chances of someone outbidding you for that reason it highly unlikely.
I think it is a great way to keep the money flowing into the economy – the first time home buyers can use the money to do needed repair or upgrades, keeping other people working! How much of that $8000 will be spent on upgrades, furniture, appliances, etc.? If the money goes back into the economy, everyone benefits! Also, everything in Michigan seems to be a short-sale and they are taking MONTHS to go through – I bid on a house in August, and still don’t have a signed purchase agreement even though the sale has been verbally approved by the bank. It is frustrating to think that after all this effort on both the sellers part and my part, we might not be able to close by Nov 30th because of the bank. I know I am not the only one in this position.
I hope it gets extended. I put an offer on a short sale home back in May. The house is vacant and the sellers bank still has not gotten back to me. Winter is about to come and if pipes freeze and burst, I don’t want the house and will have to start all over again in the search. Its not right that banks can legally take this long to respond.
I totally agree with you Genie. There are so many homes that have gone into Short Sale. I have been advised by my realtor and banker friends not to get involved. But there are so many. To find a decent home, it is hard not to find one that isnt in Short Sale. I think there should be some regulation. Like you said the house is vacant. Not like they are going to try and negotiate with the owners to stay. They should take your offer and let you have the home.
I totally agree with both of you, it’s crazy out htere right now. Just FYI for you guys if you didn’t know: a good percentage of short sales are people on the verge of forclosure and this is their last option to get out form under the house. Once the bank has forclosed on them, the LAW states that the bank cannot touch the house for 6 mos. So I am finding that the banks are being VERY finiky about who they are short selling too. Hang in there and put the pressure on them. Call everyday if necessary. I wish us all luck!!!
Well I think that your realtor should of told you to stay away from short sales, mines did
I think the bill should expand as well. I’ve
never gotten anything extra from anyone. Worked
all the time. IKt would certainly help the ecoonomy.
I think the major issue with the current financial crisis is the delay with the banks. I have been under contract since mid-July with an original closing date of September 29th. Nearly a month after my original closing, the bank has yet to make an approval. I am putting down 20%, great credit and financing less than my annual base salary (should be a slam dunk, right?). I went into this transaction due to the $8000 tax credit incentive and have no desire to continue with the sale in the event I do not make this deadline. I don’t think of this as a government “handout” but an incentive to help jumpstart the housing market. My plan is to put that $8000 into small bathroom and kitchen upgrades and pay down the principal with whatever remains.
I do think that the deadline should be extended and not just for my own benefit. The market is clogged and needs all the help it can get.
i think they should extend the tax credit!!!!!!!!!!!!!!!!
I for one am very excited, happy & grateful that the bill is on the table to extend the tax credit for 1st time homebuyers. I agree with the above comment from Olga that President Obama IS helping Americans to live better & boost the morale of many people. Afterall, homeownership is the all American dream!!!!!
I personally hope they extend it, only because we are finishing contruction on our home and with a new build you have to wait until your home is finished and loan is modified into a permanant loan before you can apply. We built this year instead of next because we wanted to take advantage of the credit and have been planning and building since March, so we are invested! We are set to finish next week but our bank is extremely slow with paperwork and we will be treading a very fine line trying to get everything in on time.
I do however, hope that people will use the credit wisely and not just blow it or think “oh well I am going to get it, so lets upgrade this and that” I have seen someone think like that and they ended up not qualifying for it and now are in terrible debt. Don’t spend money you dont have! We, are just going to put 75% into our mortgage and pay down and the rest in savings.
I am a Realtor. The tax credit has been a great thing for the market and first time home buyers.
One reason some are in jeperdy of missing out is the banks. Most of the homes in this price range are short sale or REO homes. One of my first time buyers waited over 3 months for short sale OK. Two weeks later the bank withdrew the acceptance. The buyer had spent $1,500.00 +- getting the inspection, appraisel etc. and is now out of luck. If they don’t find another property this week they will not get a closing in time.
Don’t belive all that is being said about the help the banks will give. Trust me its not true! Bank of America has a Short sale dept. If you call the number they give, you will be placed on hold for hrs. If you try to leave a msg. you will then be told the mail box is full! I did thid four days in a row with the same result! So much for help.
I think that we should all not worry about it being extended, because it’s more then likely going to be…I will put my 5,000 tax break on it….lol