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).

{ 32 comments, please add your thoughts now! }

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32 Responses to “First Time Homebuyer Tax Credit Extension (HR 3842)”

  1. Joe says:

    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.

  2. Brandon says:

    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

    • KingAsa says:

      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.

      • Zeb says:

        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 =)

        • Joe says:

          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…

          • Cassie says:

            I agree. We got swindled out of the house we were living in that we were trying to buy. Lied to more like it that we could buy it. Now we a family of 3 are living in a 1 room bedroom in my moms place. We finally found a house that we have been praying for . but like any good deal it needs some work. that tax credit will pay for repairs. i want a safe place to live in. A JOE hunny with you surving your country and putting your life on the line to make this land a SAFE place to live you the BANKS should feel honored if not abligated to give you a lone. Of the Gov should have a housing plan for Vets when they come home. Like a welcome home bonue or something. Besides. Lets face it. Money isnt what it used to be.. Its nothing but numbers now. there is no paper value. its numbers with the banks and debet cards.

      • Anonymous says:

        I agree, why shouldn’t other people have the same advantage as you.

  3. Donna says:

    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.

  4. Olga says:

    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.

    • whos name says:

      Hardly. If Obama wanted to help he would have done this in the first place. Not spending so much him self on his trips around the world and so much out to help other nations. And not rewriting bills that will do nothing but put people under gov rule. the Gov was built to help its people. not put there lives in danger and to the extent of paverty so other countrys can say hes a good man buy taking the shirts of his own people so they can rot in the sun and givn them to someone else. Things could be fixed easyly. but they dont want to lission to reason.

  5. Texas Wahoo says:

    This would really suck for those of us who don’t qualify for it. Everyone else gets 8k to use to outbid me.

    • yumihoni says:

      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.

    • Annonymous 1st time buyer says:

      Good point. And on the other end the seller agents always try to get information out of us, including whether or not we qualify for the credit, and I know it has hurt our bargaining power.

  6. PAY IT FORWARD says:

    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.

    • Annonymous 1st time buyer says:

      You must have closed on time now, since the program was extended? We are awaiting a short sale that we started January 7th, so we are in the same boat you were in.

  7. Genie says:

    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.

    • onlyinmo says:

      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.

      • yumihoni says:

        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!!!

      • vicky says:

        Well I think that your realtor should of told you to stay away from short sales, mines did

  8. Rusty says:

    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.

  9. Jillian says:

    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.

  10. nicole says:

    i think they should extend the tax credit!!!!!!!!!!!!!!!!

  11. Jessica says:

    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!!!!!

  12. Holly says:

    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.

  13. lck says:

    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.

    • Liz says:

      You are so right! Bank of America has been dragging my short out FOREVER. They haven’t even given an initial response to my offer. It should be an embarassing mess for them but they could care less. All of the short sale folks have full voicemail boxes and don’t return calls if you do leave a message. It’s craziness.

  14. vicky says:

    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

  15. Anonymous says:

    Since I bought a home in 2008 and was able to take an advantage of the 7500 tax refund/ loan, which was great. I just feel that we should not have to pay back our loan, since this year you don’t have to it’s a credit. We have all worked hard to be able to buy a house so why not help us out with a credit too.

  16. cedric says:

    last year i recieved 7500$ TAX CREDIT do i qualify for 8000$ because i purchased my home in 2009

  17. Gigi says:

    Any one know what is purchase agreement in a short sale transaction. Is the offer accepted by seller or the bank short sale approval.

    I have an escrow transaction with BOA. BOA only give 19 days for a conventional loan. We applied extension and buyer’s down payment in escrow, loan doc. in escrow, BOA still rejected extension. BOA want to redo approval, if the approval came before June 30 and escrow close before June 30.

    Could the buyer get $8000 credit?

  18. Anonymous says:

    so this says 2009 has the plan been extended

  19. Pete says:

    Much to many many peoples discust,just now we are learning the tax credit of 7500.00 for 08 home purchase was not as told,a credit as it was called.It was an intrest free loan that must be repaid at 500.00 per year.Never would have bought the home if I wasn’t tricked into the 7500.00 “credit” 2009 ,so far,do not have to repay.Go figure.

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