Obama Extends $8,000 Tax Credit for 1st Time Homebuyers & Extends to Existing Homebuyers

President Obama today gave final approval to extend an $8,000 tax credit for first-time home buyers. Under the new program, if you are a first time homebuyer (buying a home for the first time in three years), you would receive an $8,000 tax credit if you signed a purchase contract by April 30, 2010 and the deal is closed by July 1, 2010 and met all other eligibility requirements. The tax credit was previously due to expire at the end of this month.

Additionally, income limits have been increased, making more people eligible for the credit.

Single buyers earning up to $125,000 and couples earning up to $225,000 now qualify
The purchase price cannot exceed $800,000, and it must be for a principal residence

It is estimated that by the end of November, the tax credit will have been used by 1.8 million homebuyers, of which 355,000 would not have purchased a house without the tax credit (National Association of Realtors). So if you are in the market for a new home and qualify, you have a little more time to find the perfect house and get a great mortgage.

Homebuyers That Have Lived in their Residences for Five Consecutive Years Can Now Receive a $6,500 Credit!

This bill also creates a $6,500 credit for those who buy a home after living in their existing home at least 5 years. This measure applies to purchase contracts signed by April 30, 2010 and closed by June 30, 2010. This extends benefits to additional people since the current credit only applies to first-time homebuyers as defined as people who haven’t owned a residence in the past 3 years.

This is great if you are considering buying a new home and meet the revised terms but thought you weren’t eligible for the tax credit because you were not considered a first time homebuyer.

The bill was passed overwhelmingly by the House and was signed by President Obama today.

If you are in the market for a new home loan this is excellent news. The extension of the tax credit combined with low housing prices and some of the lowest mortgage rates we have seen in over 50 years presents homebuyers with a distinct advantage. Act now to find a lender or get free expert advice on whether or not you meet all terms of the tax credit!