Tax Credit for First Time Homebuyers May Be Extended

By: Ellen Frick, Outreach Coordinator, NHS of Baltimore

The $8000 tax credit for first-time homebuyers is currently set to expire on November 30, 2009. However, Congress is considering extending that deadline until April 2010. Along with other government programs, such as Cash for Clunkers, the housing tax credit may have contributed to a recent 3.5% boost in the United States economy. More Americans have been purchasing homes due to the cash incentive. Unfortunately, some people been defrauding the tax credit program and using it in ways that were not intended; a couple hundred individuals under eighteen years of age, including a four-year-old, were able to receive the money in their names.

If the credit is to be extended, additional conditions and developments will be added to regulate and revise the distribution of funds. More documentation will be required on behalf of applicants in an effort to reduce abuse of the program. In addition to a time extension, the revisions of the tax credit would also make more individuals eligible to receive the money. Under the current program, yearly income for eligibility is capped at $75,000 for individuals and $150,000 for couples. The proposed revision would increase those numbers to $125,000 and $250,000, respectively. Considerations are also underway to extend the tax credit beyond just first-time homebuyers. Current homeowners looking to move may be able to receive up to $6,500 if they meet the monetary requirements and have resided in their current homes for at least five years.

Unsurprisingly, the issue of extending the homeowners’ tax credit has aroused several debates. Still, if the credit does not end up being extended, there are other sources to look towards for housing and down payment cost assistance. In Maryland, plenty of programs are in place to assist potential homeowners financially. Keep in mind that in order to be eligible for many of these grants, a certificate documenting homebuyer education is required. NHS of Baltimore offers homebuyer education classes, as well as one-on-one sessions with a housing counselor.