The House Financial Services committee meets. ...Image via Wikipedia

The First Time Home Buyer’s Tax Credit has had a great impact on the housing market this year. In the industry we have watched the market get better every quarter this year, due in large part to the numbers of first time home buyers that came into the market to get their %8,000 tax credit. The question in the minds of the professionals across the country was whether or not the market would sustain itself without that credit. Because of the rising unemployemnt rates and the weak consumer confidence, there was a real concern that the stimulus was going to go away before the need for it had dissolved!

Two weeks ago I traveled to Washington DC, along with 48 other Realtors from across the country, to meet with members of Congress and discuss an extension of the First Time Home Buyer’s Tax Credit so that we could continue the positive impact it has had, and hopefully spur the economy as people bought paint, carpets, fixtures, furniture, and the thousands of other little things that are bought everytime a home sells. . The feedback from the congress was positive about the desire to extend, but there was hesitation from some of the memberswho wanted to make sure they knew where the money would come from to pay for the tax credit. With time running out for the existing tax credit ending November 30, 2009, I didn’t believe there was anyway this could get done before the deadline.

Boy was I wrong! Yesterday the Senate voted 98-0 to pass an extension until April 30, 2010. Today the House voted 412-12 to pass it. (I’ll let you know in a future blog who the 12 representatives were that voted against it) All we need is President Obama’s signature and we are good to go. That is expected to happen very quickly. In addition, they have modified the current criteria to increase the income limits and also include current homeowners. .

In real simple terms, here’s what we have:

  1. First time buyers get the same $8,000 credit under the same terms
  2. Current homeonwers may receive a $6,500 tax credit if they have lived in the same residence for at least 5 consecutive years in the last 8 years.
  3. There are higher income limits to the program allowing more people to participate

There’s still more, but here’s a great chart that easily explains everything – but the bottom line is that buyer’s have until April 30, 2010 to find a home and enter into a contract that will settle prior to July1, 2010 – and hopefully by then the market will have corrected itself.  In any case, smart home buyers are going to be out to take advantage of this limited window of opportunity.  Or at least I think so – we’ll see how the market reacts over the next few months.

So the whole thing to learn here for me is that our government can be very quick to respond and move important legislation through. It makes me feel that our voice counts and reminds me that when there is an important issue we need to call, email or visit our elected officials, and get everyone you can, to do the same.  It sure worked this time!

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