First Time Homebuyer Credits Will Likely Be Extended

It certainly appears that the government credits for first time homebuyers will be extended. The real question at this time seems to be in what form the credit will appear and for how long will they be extended. The following article comes from Dow Jones and came out yesterday evening. It seems this type of compromise is the most likely. By Jessica Holzer, Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- U.S. senators are nearing a deal on a measure to extend the first-time home buyer tax credit through next April and expand it to some buyers who already own a home. Under the deal, certain "step up" buyers who have lived in their current home for at least five years would also qualify for the tax credit, according to lobbyists close to the negotiations. The deal comes amid heavy housing industry pressure to extend the tax credit, which is set to expire Dec. 1 unless Congress acts. The measure, which proponents hope to offer as an amendment to legislation extending jobless benefits, could receive a Senate vote this week. Under the measure, the credit would run through April 30 of next year, though sales contracts in force by that date would be eligible as long as the deal closes within 60 days. The credit would amount to 10% of the sales price, with a maximum of $7,290. The current credit has a cap of $8,000. To qualify, first-time home buyers must make no more than $75,000 a year or $ 150,000 for couples. For step up borrowers, the income caps are $125,000 for individuals and $250,000 for couples. The measure aims to strike a middle ground between two Senate proposals. Sens. Christopher Dodd (D., Conn.) and Johnny Isakson (R., Ga.) had sought to extend the tax credit through June 30 of next year and open it to all home buyers. Meanwhile, Senate Majority Leader Harry Reid (D., Nev.) and Sen. Max Baucus ( D., Mont.) were pushing a four-month extension that would have gradually phased out over next year. It would have applied only to first-timers.