11/04/09 Update:

The Senate voted overwhelmingly today on a bill which included the extension and expansion of the homebuyer tax credit.  The bill passed the Senate with a 98-0 vote Wednesday.  The bill included language to extend the first-time hombuyer tax credit of up to $8,000  through June of 2010 as long as buyers enter into a binding contacting before April 30, 2010 and expanded the program to include a $6,500 tax credit for move-up buyer’s who have lived in their current residences for at least five years.  The bill also increased the income ceiling to $125,000 for individuals and $250,000 for couples.  I’ve also heard that the credit is/will be only available for homes up to $800,000.  We’ll have further detail once the bill has passed the House next and the official details are released.

The bill will now go to the House, which is expected to quickly vote, pass and send it on the The President to sign.

Stay tuned for more news on this!

Look forward to my next update!

10/29/09 Update:

According to reports today from Capitol Hill, The AP And Reuters; Senators agreed late Wednesday to extend the popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat/move-up buyers.

Senators agreed to extend the existing tax credit for first-time homebuyers up to $8,000; while offering a reduced credit of up to $6,500 to repeat/move-up buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.

The tax credits would be available to homebuyers who sign sales agreements by the end of April 2010.  They would have until the end of June 2010 to close on their new homes, according to a summary of the legislation being circulated among lawmakers.  The Senate could vote on the overall bill as early as Thursday, but lawmakers were still haggling over several unrelated amendments Wednesday evening.  House leaders have also said they support extending the tax credit for homebuyers.

Real estate industry experts and representatives said consumer uncertainty about the tax credit is hurting new home sales. September’s decline was the first since March 2009.  It takes 45 to 60 days to close on a house purchase, making it unlikely a sale made today would be consummated by the end of November, said Lucien Salvant, spokesman for the National Association of Realtors.  “Buyers right now have an incentive to hold off, not knowing whether the credit will be extended,” Salvant said.

Roughly 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

Stay tuned for updates!

Is the first-time homebuyer tax credit going to ended or be extended, changed or replaced?  That’s the million dollar question I’ve been receiving all month from clients and Realtors.

The CA Mortgage Guy is not sure as of yet, however there was an article today on Bloomberg.com which stated the program may be replaced with a new tax credit program with a smaller tax credit amount capped at $7,290 and based upon a percentage of a home’s sales price – 10% at time of the article publication and current draft of the proposed legislation.

A great change I see from the article is the expansion of the tax credit to move-up buyers..increasing the income eligibility to $125,000 for individuals and $250,000 for couples; up from the current first-time homebuyer tax credit income eligibility of $75,000 for individuals and $150,000 for couples; and leaving the income eligibility for first-time buyers (first-time buyers are classified by the IRS as individuals who have not owned a home within the past three years) at current levels.  Makes sense to me!  Move-up buyers generally do have higher incomes and have been completely shut-out of the current tax credit program.

With the current program ending in approximately 30 days, we are sure to hear an announcement soon.  I’ll keep you posted on any new updates.  Make sure and sign up for the CA Mortgage Guy new content/blog post update announcements by completing the Follow Me On The Web section in the left column…..you’ll be notified via email of new content changes and blog post updates.

Have a great day and look forward to my next post!