Wade’s World

Apparently all the talk about the $8000 first-time homebuyer tax credit being extended and expanded is coming to pass. According to a USA Today article…

“Senators agreed to extend the existing tax credit for first-time home buyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years”

Obama seems to be fully behind the extension of the tax credit, so it is will likely be finalized very soon. The proposed bill would extend the current $8000 tax credit for new homebuyers from it’s current end date of November 30th, 2009 to April 30th 2010.
$6500 tax credit for home buyersA different type of deadline

Just to clarify, they are discussing changing how the credit deadline works. Currently, you have to close on your home purchase by November 30th to be eligible. But under the new plan…

“The Senate agreement stipulates that buyers must have a sales contract on a house by April 30 to be eligible, but it gives them an additional 60 days to close the purchase. Looked at one way, the effective deadline of the credit under this agreement is actually the end of June.” (USNews)
Rules for current homeowners

As mentioned above, it would also allow current homeowners to get in the game by offering them $6500 if they have been in their current house for at least 5 years.

“The current credit prevents home buyers who have owned a primary residence within the past three years from claiming the credit. The agreement, however, would allow current homeowners to claim up to $6,500 as long as the property they are vacating has been their primary residence for at least five years.”

If you are a current homeowner looking to get in on the $6500, it would likely have an effective date of December 1st, 2009.

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The House of Representatives has voted to pass legislation extending the home buyer tax credit until April 30, 2009.

Last night the Senate voted 98-0 to pass the legislation. Next the bill will head to President Obama to be signed into law on Friday.

While the bill extends the $8,000 tax credit for first time home buyers, it also makes available a tax credit to homeowners who have lived in their current residence for at least five years.  The credit for these buyers will be capped at $6,500.

Income levels will be extended from the current limits of $75,000 for a single purchaser and $150,000 for couples to $125,000 and $225,000 respectively.  Above those limits there are diminishing credits available.

Housing interests, especially the National Association of Home Builders and the National Association of Realtors, has pushed strongly for the extension and the Obama administration has also lobbied heavily for its passage. However, not everyone was in favor of it.

Some critics have charged that the tax credit has merely moved sales that would have occurred sooner or later to an earlier date and that, when the credit finally does go away, the market will experience another severe downturn. A diametrically opposed opinion would have it that, while 1.4 million claims have been made, few sales were actually inspired by the credit.  Others have argued that the current interest rates and low housing prices are enough of an incentive without spending tax money. The extension is expected to cost an estimated $11 billion on top of the $10 billion that has been spent to date.

There have also been charges of fraud in the operation of the program.  To combat this the new law has some expanded safeguards including a minimum age of 18 for obtaining the credit, a requirement that a settlement statement accompany the tax return claiming the credit and a prohibition on non-arms length transactions.

Another criticism of the extension has been that it ends just as the “spring market” is getting underway.  Diane Olick writing for CNBC’s RealtyCheck said it “is sort of like offering cheap snow boots in July.”

Robert E. Story, Jr., CMB, Chairman of the Mortgage Bankers Association (MBA), today issued the following statement in response to the passage in the U.S. Congress of legislation to extend and expand the homebuyer tax credit.

“At a time when we are finally starting to see some signs of life in the housing and mortgage markets, extending and expanding the homebuyer tax credit is a critical step to keeping the momentum.  This has been one of MBA’s top single family legislative priorities, and we are very glad to see that policymakers on both sides of the aisle see the importance of this measure.

“The existing credit for first-time homebuyers has helped move a segment of potential homebuyers off the sidelines and into their first homes.  By expanding it to qualified existing homeowners, we can help stimulate even more home purchases for qualified buyers.  I also want to applaud measures in the bill that will help eliminate fraudulent use of the tax credit.”

From Mortgage News Daily

http://www.mortgagenewsdaily.com/11052009_tax_credit_extension.asp

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What do all of these have in common? They are all great places to stay or visit while in Florida. My wife, Steph and I just returned from 10 days in Orlando and St. Augustine. We hit all of the Disney Parks while staying at a timeshare called The Fountains on I-Drive in  Buena Vista. It was a great trip and we had great weather.

We visited St. Augustine, the oldest city in the US, for Halloween night for its famous ghost tours and ate a a great BBQ place called Scarlett O’Hara’s just down the road from Flagler College. What a beautiful campus and town. We also made it out to the World Golf Village for a quick visit. They had a great sale going on at the golf shop, but it was too late to visit the Hall of Fame so we just walked around the property and found yet another great BlueGreen condo development there.

We were not sure of what was going at the WGV as they were setting up an outdoor stage on Sunday evening. It was not until we returned home that I found out what the stage was for. They did the Hall of Fame induction ceremony the day after we left and fellow Kappa Sigma Lanny Wadkins was inducted into the Golf Hall of Fame. Congrats Brother Lanny! Sorry we missed it. I doubt I could have gotten in any way.

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