Momentum Builds for the First Time Home Buyer Tax Credit

It was revealed yesterday that bi-partisan support in the Senate is in place to extend the $8,000 first time home buyer tax credit, currently set to expire on November 30th. Under the Senate plan, The Washington Post reports, first time home buyers closing before June 30, 2010 (contract ratification has to take place no later than April 30) will be eligible for the tax credit.

Furthermore, the Senate proposal will expand the current measure to include individuals making $125,000 and couples making $250,000 combined. The Senate version will also provide a $6,500 credit to people who have lived in their home for up to five years if they purchase a new primary residence.

The Senate proposal will have to be reconciled with the proposal in the House to come up with a final proposal that the President can sign. These measures cannot come soon enough for the fragile recovery in the real estate market. Recent data shows that while there was a spike in September home sales, it is likely to be temporary because October's activity heretofore is not as robust.

Mark Zaidan, Licensed Mortgage Lender

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