Ruth's Blog: August 2009

Many homebuyers are struggling with the decision of whether to buy now or wait and see if the 2009 Economic Stimulus Package ups the ante!

Currently, the tax credit available offers up to $8,000 to qualified first time homeowners who occupy the property as their primary residence for a minimum of 3 years. (Tax Credit Details)

But word of the Home Buyer Tax Credit Act of 2009 has caused many would-be buyers to stop and think about whether now really is the best time to buy. Two bills have been introduced, one by the Senate and one by the House of Representatives. Yet, each bill is basically the same.

H.R. 1245 Home Buyer Tax Credit Act of 2009, was introduced March 22, 2009 by Rep. Ken Calvert [R-CA44] and has 29 co-sponsors. It has been referred to the House Committee on Ways and Means. (Track HR 1245)

Home Buyer Tax Credit Act of 2009 was introduced June 10, 2009 by Sen. John Isakson [R-GA] and has 16 cosponsors. The bill has been referred to the Senate Finance Committee. (Track S. 1230)

• Basically the proposed legislation would still be up to 10% of the sales price, but increase the maximum one time tax credit from $8,000 to $15,000.
• Be available to ANY homebuyer whether first time or move up.
• Only have a two year primary residency requirement.

Now, here's the thing we need to remember: the initial piece of legislation that our current $8,000 tax credit stems from ALSO was proposing $15,000 and to be allowed for all home buyers. It wasn't until the last minutes of legislation that the amount was lowered from $15,000 to $8,000!

So, should home buyers roll the dice and hope rates stay low and the tax credit goes up??? What are YOUR thoughts?

To shop (and close) on a home and still get the 1st time home buyer credit, that is!

The clock is ticking ... and with the new mortgage disclosure regulations, you better subtract at least 30 days just to get your loan closed. So now you only have 80 days left to get your new home under contract!

Just as a reminder, here are a few of the features of the program:

1) Credit is for 1st time homeowners (defined as individuals who have not owned a home in the past 3 years)

2) Credit is equal to 10% of the sales price up to $8,000

3) Single taxpayers up to $75,000 annually and married couples with incomes up to $150,000 qualify for the full credit

4) Home must be purchased PRIOR to December 1, 2009

For more details on this program, visit this website: NAHB 1XHO INFO

To claim the credit, fill out IRS form 5405