Congress extends and expands credit for home buyers
By Herb WeisbaumCongress wants more people to buy homes, so it's extending and expanding a tax credit program set to expire in just a few weeks. MultimediaMissed out on Cash for Clunkers? Congress has another deal for you: buy a home before May 1 and cut your tax bill. It's all part of the government effort to help the struggling housing industry. Since January, first-time home buyers have been getting tax credits of up to $8,000 as part of the economic stimulus package. Real estate agents say that tax credit did help boost sales, just like Cash for Clunkers got people to buy new cars. The industry estimates 350,000 buyers would not have purchased their homes without the credit. But that credit was due to expire at the end of November. Congress agreed to extend it into the spring and to expand it to many people who already own homes. First-time home buyers - or people who haven't owned homes in the previous three years - can get up to an $8,000 credit. Buyers who have owned their current homes at least five years are eligible for a credit of up to $6,500 depending on their income. To qualify, you must sign a purchase agreement before May 1 and close before July 1. Real estate agents hope the expanded housing credit will help stabilize the markets during the winter months when sales are typically slow. The chief economist at the National Association of Realtors says the tax credit has helped increase demand and reduce inventory which resulted in sellers getting higher prices than they would have otherwise. Extending and expanding the home buyers tax credit is expected to cost the government about $11 billion in lost taxes. Realtors, home builders and mortgage bankers have lobbied hard for the expanded credit. lawmakers said the program will not be extended again. President Barack Obama is expected to sign the bill into law Friday. Also on Thursday, the government-controlled mortgage company Fannie Mae announced a new program that could give some of borrowers on the verge of foreclosure a new option -- rent their homes for a time from the company. |
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February 9, 2012
- Roseburg, Oregon
