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Justin McHood

8000 Tax Credit May Be Extended And Rise

Posted on Jun 24 by Justin McHood

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One of the most popular topics with new home buyers is the new 8000 tax credit for new home buyers. There is no doubt that for first time home buyers, this tax credit has been a strong incentive to purchase a home – and the entry level home market has seen improvement as a result.

Now there is talk about extending the 8000 tax credit until 2010 and raising it to $15,000 as well.

According to Bernard Baumohl, an economist at the Economic Outlook Group:

“I’m fairly confident that (Congress) will extend the tax credit, because it is so important that housing come back, but raising the tax credit will be difficult because it reduces taxes even more.”

Current Proposals:

• A Senate bill to expand the tax credit to $15,000 for any home buyer regardless of income was introduced this month by Sen. Johnny Isakson, R-Ga. It is co-sponsored by Senate Banking Committee Chairman Chris Dodd, D-Conn.

• A House bill to keep the $8,000 credit in place until June 2010 and expand it to all home buyers was introduced last month by Rep. Kenny Marchant, R-Texas. It also would provide a $3,000 credit to homeowners who refinance.

• Another bill in the House, introduced by Rep. Eddie Bernice Johnson, D-Texas, would extend the credit to all home buyers through 2010.

Generally speaking, it seems to be a very popular idea to extend the tax credit deadline and a somewhat popular idea to increase the tax credit from 8000 to 15,000 — but, as we learned when the initial tax credit was passed into law, it ain’t over until it is over — so anything can happen.

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57 Responses to “8000 Tax Credit May Be Extended And Rise”

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  1. Saul Cruz says:
    July 7, 2009 at 4:29 am

    I really hope this passes. We want to purchase a home and receive the tax credit, but I sold my last home December 07, 2006. Because of those 7-8 days, I wouldn’t qualify for not owning within the last 3 years.

  2. FondaHonda says:
    July 16, 2009 at 7:41 pm

    I hope this passes, too! I am thinking about building a house, but the closing must be before December 1 in order to qualify. This tax credit would help trememdously with the closing costs, too!

  3. RealtorBeth says:
    August 3, 2009 at 2:59 pm

    I hope they at least extend the current program as it is structured. My first time buyers are in tough competition with investors and are being forced to make offers on short sales which can take many months to complete. We need the extension to take the pressure off first timers who are panicking that they won’t be able to qualify for it because their purchases will not close before Dec. 1st and they won’t close because the banks take so long to approve short sales.

  4. Marisa says:
    August 11, 2009 at 3:28 pm

    I agree with RealtorBeth! There is so much pressure on first time home buyers to close before that deadline, and we are so close to ready but not! This would be extremely important to us.

  5. Amber says:
    August 14, 2009 at 8:04 am

    Saul I am in exatcly the same situation with the same date! Dec 7th made it 7 days too late for me! i hope it passes!

  6. Ahomeofmyown says:
    August 15, 2009 at 6:44 pm

    I hope they extend the program as well! I’m now feeling pressured to meet the current deadline!

  7. HopingTracey says:
    August 16, 2009 at 10:45 am

    I hope they extend it too. I am planning on building a home but no I will not meet the Dec. 1 deadline. Oh how extra nice it would be for all if it is increased to $15,000.

  8. Sanibel99 says:
    August 17, 2009 at 9:13 am

    I emailed my senators from the State of Connecticut to extend this program. I need more time to do this. Anyone have any ideas how we can push Congress to make this happen?

  9. Lori - FHA Buyer says:
    August 28, 2009 at 7:01 am

    I hope they extend this program. My husband and I are panicking that we will not close in time by the deadline. We are in the middle of a short sale and will have to make a Decision to walk in 4 weeks. The process is so stressful! Its a waiting game everyday to see if we have a closing date. We would love to take advantage of this program! We cross are fingers hoping that our closing date is not Dec 1st! – How awful would that feel!

  10. NicoleBaccus says:
    August 29, 2009 at 5:49 am

    Yes! RealtorBeth’s comment is right on!I feel I’m under a lot of pressure to find a home ASAP as a first time home buyer in order to qualify for the tax credit, however the banks are taking their time, sometimes 3 months, to respond back to a buyers offer.

  11. Lori says:
    September 3, 2009 at 8:59 am

    I can relate to Lori’s situation. I’m also in the beginning of another short sale. First one was going to take forever. I am so stressed out and quite frankly disappointed with the system. Very discouraging to first time buyers.

  12. Bruce says:
    September 4, 2009 at 8:19 pm

    My wife and I are also starting to stress a little that we won’t make the credit deadline of Dec 1st. We have a pending short sale that the seller has approved but we are waiting on the bank to make a decision and they are in no hurry! We have looked at over 50 houses and less than 10 have been seller owned. I guess with the banks getting bailouts they don’t need our money.

  13. Michael says:
    September 8, 2009 at 5:25 am

    I’m trying to sell a starter home and am relying on the deadline to stimulate increased demand over the next few weeks. If buyers believe an extension and/or increase in the credit is to be forthcoming, the demand will simply be shifted and home values will continue to depreciate. The “free lunch” has to stop sometime. We’re simply blowing up another short-term bubble that will have disasterous results for the economy down the road.

  14. reddy says:
    September 8, 2009 at 6:48 am

    I am planning to buy a house in this month.. it would be really great if it is extended.

  15. Femmy says:
    September 16, 2009 at 1:40 pm

    I just gave up on the chances of meeting the Dec 1 deadline.
    Learning that there are talks of extending and even expanding the credit is such a relief.

  16. Jessenia says:
    September 16, 2009 at 5:27 pm

    I am in the middle of of bying a home, all I can say is ughhh, it has been really stressful. I started the process the end of August, I was just told by the underwriter that is best for us to get the loan with the builder’s preffer lender. Why wait 1 month to tell me that after I was already pre-approved. I will have to start the process again, I just hope to close before the end of November…I don’t want to give up but the banks needs to work a little faster!!

  17. carlos says:
    September 17, 2009 at 10:39 am

    I’ve been working on a short sale since June and no the bank does not want to be contacted for an update until Oct 8th, It’s really getting down to the bone and I’m wooried too that we won’t make the dead line…

    Please we need this extened….What can we do?

  18. Thomas says:
    September 17, 2009 at 2:41 pm

    Hi, I am a taxpayer and a homeowner. I saved my money and bought a house I could afford. This money isn’t just popping into existence. This will simply artificially raise prices which is great if I am in the real estate business but bad for the economy long term. It is pure selfishness on the part of those who stand to benefit (I’m looking at you real estate people)

  19. HOWARD says:
    September 17, 2009 at 7:12 pm

    ME AND MY HUBAND FILL THE RUSH. WE CAN DO ANYTHING UNTIL OCT 17 AND FILL WE NEED A LITTLE MORE TIME.

  20. bobbie says:
    September 20, 2009 at 8:05 pm

    I’m building and I’m so nervous I won’t close on time and it will be so upsetting to miss it by a day or so. I could really use the money. My main problem is my final closing consist on me getting insurance and if you live in Fl. we are in hurricane season and you have to wait to get insurance until after hurricane season.

  21. Reality Check says:
    September 21, 2009 at 6:30 am

    Get real people, this “tax credit” is only holding off the real demise of the real estate market. Get ready to learn to speak Chinese.

  22. Katie says:
    September 21, 2009 at 8:05 am

    I also think that it should be extended. I am currently looking to buy, but there are very few homes in my price range, and when they get on the market they go quick, or they need some extensive work, and with 203K loans, they take much longer to close. If the tax credit was extended, then I may be able to take advantage of it. It would allow me to have a safety net if anything does happen, as this economic slump isn’t over yet, and anything can happen.

  23. Sarah says:
    September 21, 2009 at 10:18 am

    I can relate as well. We’ve had a short sale accepted by the owner and it’s been in with the bank for 5 weeks now. AND, the house we’re renting is being foreclosed. We’re trying to move before we are forced out of our rental and before the tax-credit expires. The credit needs to be extended as it is currently and the short-sale process needs to change. We’ve looked at about 50 homes and only 2 have been straight sales; the rest were short-sales.

  24. jyl smith says:
    September 21, 2009 at 4:33 pm

    This tax credit is the difference between me being able to afford a home or not. Between a down payment and closing costs, my savings will be depleted and the $8000 will go as a reserve and to help to pay for repairs and renovations. This means money going to painters, furniture stores, landscapers, carpenters….it’s not a “free lunch” for the buyer. It’s crucial that congress extend the deadline for the sake of the entire economy.

  25. ry13843 says:
    September 22, 2009 at 9:47 am

    Houses will not continues to depreciate, it’s already almost at a standstill and in the next 3-4 months, going to rise. It’s textbook economic fluctuation. The money is supposed to stimulate the economy. Though, then again people should of been smart then to buy houses at imaginary prices four years ago. I hope its extended too!

  26. Barbara says:
    September 22, 2009 at 6:31 pm

    I’ve heard it was extended

  27. Gil says:
    September 23, 2009 at 11:40 am

    My wife and I are like most people looking for a home. We been looking for homes for a month and noticed how many short sales home vs. forclosed homes. In the news they talk about all the forclosed homes,”Where are they”? Also, for us not to get stressed out about the tax credt we decided not to think about it so much and go foward. IT HAS WORKED!!! Good luck!

  28. Brian says:
    September 24, 2009 at 9:58 am

    I am a loan officer and hope they extend this credit and make it larger, all into perpetuity.

  29. Joe says:
    September 28, 2009 at 2:30 pm

    My fiance and I are in the process of closing on a home by Nov. 2nd. If they extend the tax credit from 8,000 to 15,000 will we be able to claim the difference on next year’s taxes?

  30. Kat says:
    September 29, 2009 at 9:23 am

    In our price range there are 50 listings….only 1 is not a forclosure or short sale. There is no time to buy a house before the deadline so we are giving up. If they extend the credit we would be grateful.

  31. Sheila says:
    September 29, 2009 at 12:41 pm

    Extending the tax credit deadline means I can purchase a home, without it, no chance. Congress, give us first time home buyers a little more time, please.

  32. Jess says:
    September 30, 2009 at 6:07 am

    I have been waiting on a house since May (Short Sale). The house went up for sale in February. The bank wanted the house to be on the market for 90 days before offers were even looked at. My offer on the house was accepted in May. It has been in the approval process for 4 months now. Since it has now hit 6 months since it was on the market it had to get an new appraisal done and the entire process had to start all over. We were on the last step of the process and it is starting over – pretty ridiculus. It has taken them 3 weeks to get the appraisal done. So now it will be another 3-4 months if they take as long as last time. This short sale has the potential to be a 9 month process. I guess I should have started one in January and I would’ve had a chance at the first time homebuyer credit… This needs to be extended at least for Short Sales. I have been trying to buy this house and it is the banks fault that they are not doing the paperwork in a timely fashion. It just keeps switching hands because no one has time for it and the same paperwork needs to be re-sent cause it is old or lost. I’m very very frustrated. There are not many regular sales or foreclosure sales – most are short sales, so what am I to do? I have been waiting for 4-5 months already and since their is no participation agreement until it is accepted by the bank I cannot lock in a rate. Back in May it was at 4.6% now it over 5% and rising. By January when it is maybe over where will the interest rate be? So I’m jnot getting the $8000 or a good interest rate. The homebuying process was supposed to be fun, but it is the worst thing I have ever had to do. I hate this bank!

  33. firsttimebuyer says:
    October 5, 2009 at 10:13 pm

    As I understand it, a freeze was put on foreclosures for approx. 6 months; restarting in May-June (reason for leveling off). Consquently, June’s forclosure rate was huge. The 8000 is a decoy of sorts. Who cares about pennys when it could be dollars? We have chosen to buy a home where we would like to be stuck for awhile; if we can afford it. I agree that the $ looks good, but if they choose to double down (1500) that scares me. Look at the bigger picture, why would the powers that be do that? Every market is different some are at the bottom, however ours is about to drop. Can’t get mad at the realtors, that’s like asking the starving not to steal. Oh, and for you short saler’s I saw a stat that 5% close. After reading above I believe it.
    Ps. As for the chinese comment, I heard Rossetta stone works. We may all need it!

  34. brian says:
    October 7, 2009 at 11:46 am

    I will be a first time home buyer. I hope this tax credit goes away. By it expiring the home prices will go down slightly. But “slightly” should be alot more than $8000 (in a buyers market) Imagine $8000 saving on your loan financed for 30 years. The tax credit makes no sense at all for my family. I

  35. Nathan says:
    October 8, 2009 at 5:31 pm

    If getting an 8k bonus from the govt makes all of the difference of being able to afford the house, you shouldnt be buying the house. What happened to people actually having to save for a down payment and a house? I guess everyone expects the govt should just give away hard earned tax dollars. I will qualify for the credit if extended but I DO NOT agree with it. I dont have the exact stats but I would have to imagine that first time home buyers dont typically make up the majority of folks paying for the majority of taxes. Why should someone who already pays minimal taxes get more of my tax dollars? I understand that if it is available why not take it but I dont think they should extend it. I dont it should have ever been passed in the first place. Oh well its only hard working people’s taxes being wasted right!!

  36. matthew says:
    October 9, 2009 at 11:04 am

    i wish that the government would just keep buying mortgage backed securities and keep the rates low. you can incent people all day with a tax credit…but if they are paying 7% interest rates…it will effect all homebuyers, those who what to refinance, etc.

  37. lisa says:
    October 10, 2009 at 2:51 pm

    I have been @ a short sale since May. I offered the asking price, waited through all of the stages just to find out that they rejected my offer. WHAT??? We offered another $10,000 (that they were asking) and they threw us right back to the beginning. We are still waiting; they won’t even tell us if we will be able to get this done by the deadline!!!! I am a 100% disabled veteran, so I am on a fixed income and this home is what I can afford but I need the $8000 for a cushion. I have been extremely anxious to the point of being sick. This is a chance of a lifetime for me to buy a house and yet the bank is in total control of whether or not I get a house and get a tax credit. Even the senator’s office can’t give me any answers. I think those that have been in the system this long should at least be “grandfathered” in for the tax credit. It is not in our control of when we can close on these homes. The bank is in control and they DON’T care! It is beyond ridiculous.

  38. david says:
    October 11, 2009 at 2:29 pm

    I hope this passes to help out all those who have been waiting for ridiculous amounts of time for a bank to approve short sales

  39. tina says says:
    October 14, 2009 at 5:58 am

    I’am a first time home buyer.I think that it should be exdened so we can have time to look around for sales no short sales.Theres no time left to look for what i want and meet the dead line

  40. gary says:
    October 14, 2009 at 7:02 pm

    Why don’t we just buy a home for everyone who wants one. Who cares about the debt, let our children and grandchildren pay the debt. They will get the benefit of living or visiting our home they will be buying. If homes are considered investments, then investments rise and fall. Let’s just freeze the price of homes and maybe all of the flippers and investors will get out of the market and the prices will become stable so that we can save our money for a down payment to buy a house.

  41. Wendi says:
    October 17, 2009 at 8:33 pm

    I have been working with a couple that has been under contract to purchase a home since Aug 20, 2009. The appraisal came back low and BofA took 3 weeks to resolve this. It has taken another 2 weeks to get the underwritters to send the contract to USDA RD financing. USDA RD has been taking 7 weeks to get thru their back log of loans. Add another week for this to go back to USDA and now Mid October we may not make the Nov 30th cut off date for the $8,000 tax credit. I feel the credit should be extended due to the banking delays that are putting buyers at risk of not closing before Nov 30th. This buyer planned for delays we were expecting 7 weeks in USDA RD files but the 5+ weeks of BofA banking hang ups was beyond what we could have anticipated. Buyers like this should have at least thru the end of December to close on their homes.

  42. LQ says:
    October 18, 2009 at 6:56 pm

    I too hope the tax credit is extended as trying for this year is impossible. I have not had a pleasant experience in trying to purchase a home as it is stressful and trying to find the right people to deal with is difficult as well.

  43. keithincali says:
    October 19, 2009 at 7:31 pm

    The tax break should be extended at least 6 months and increased to $15000. It’s helping the economy recover and helping people buy homes. It’s a win-win.

  44. Kent says:
    October 20, 2009 at 4:56 am

    I really think that they should extend this tax credit. It will help continue americians to rebuild on our future

  45. REALTOR Patt says:
    October 20, 2009 at 10:08 am

    No. This tax credit should not be extended. You make a promise, you keep it. You give a dead line, you stick to it. November 30 is encourageing, if not forcing, the “If I find exactly what I want in a price ranger lower than it should be” buyers to actually make an offer.
    November 30 means the loan officers need to immediately tell buyers what they need,order appraisals, submit to underwriters, return phone calls, get the loan closed.
    November 30 tax credit dead line does NOT mean house prices are $8,000 higher. More often than not, it is an incentive to current sellers to lower their list & acceptance prices to allow first time buyers to actually close on their home before November 30.
    Very often, like the two sales I plan to close before November 30, those sellers are now new buyers for other homes currently listed.
    If any thing, the tax credit November 30 deadline really should be extended for, and ONLY for, those unfortunate buyers who have made an accepted offer and are currently trying to close a short sale or foreclosure.
    If the real estate begins to stagnate this Spring, it would be a good idea to institute a NEW tax credit, at a lower amount, maybe March or April.
    But remember who is actually paying for these “incentives.” Taxpayers. Including the Real Estate agents who collect a big fat commission.
    Yea right …

  46. jack says:
    October 20, 2009 at 1:14 pm

    If this passes allowing any home buyer (not just first time), We will be buying immediately. We are anxiously waiting for the results!

  47. Melanie says:
    October 21, 2009 at 6:13 am

    Would love for them to extend the tax credit. They need to lift the first time home buyers requirement.It would help out soooo much with buying furniture and other items for the house.

  48. Mariella Callmet says:
    October 21, 2009 at 11:37 am

    I really hope they extend this credit. I’m trying to buy a house that is a short-sale, I put my offer in July and still nothing, I don’t think I will closing the deal by Nov 30th. Please extend, most houses in California are either forclosures or short-sales and banks are not helping speeding the process.

  49. Mad as hell!!! says:
    October 22, 2009 at 8:45 am

    How does this help people like me who purchased in April of 2008? I have to pay back the 7500 tax credit they gave me at that time. Since i purchased my house everything has gone up except my home value. I tried to refinance under your (i did not vote for him) great and fearless leaders proposed stimulus package and was told i don’t qualify. I have had a newborn since then and a wife out of work and i am barely holding a roof over our heads. As usual, the middle class in this country suffers. The rich get richer and the poor get help. The middle class is becoming an endangered species. Most all of these politicians who are put in office are crooks and lie to the public everyday. Misappropriating and mismanaging funds and making their wallets fatter on my back is really starting to piss me off. We the American people just sit back and take their crap like the jerks we are. Especially the middle class!

  50. krystina says:
    October 24, 2009 at 11:35 am

    I heard that you need to take a class in order to recieve the tax credit is this true?

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