So the time has come to wave goodbye to the first time homebuyer credit. If you are working with first time home buyers and you haven’t locked down a property in escrow by the end of next month your clients might not be able to make the deadline of Dec 1, 2009 to get that rebate. Remember that escrow or the real estate transaction must be closed, finalized and done by Dec 1, 2009. Some people think that as long as the property is in the closing process by Dec 1 they would still get the credit but that is false. I’m sorry to inform you but it has to be completely closed.
An Extension to the First Time Home Buyer Credit?
With that said many people have been asking me if I knew if they were going to extend the first time home buyer credit. I had not heard of anything so I did a little research and low and behold there was a bill introduced back in June 10, 2009. This bill has not received too much attention because people were not worried about the tax credit expiring. Now that the clock is ticking I am sure the tax credit will be coming back into the lexicon a lot stronger in the next couple months
If you have never followed a bill in your life then you might want to take notice as an investor, real estate agent, loan officer etc. This one will affect you once it’s passed until it expires in 2011.
Here is what the current First Time Home Buyer Tax Credit looks like:
- You must be a first time home buyer (not owned a home in the last 3 years).
- Must close your purchase by December 1, 2009.
- Home purchased must be your principal residence.
- Income restrictions of $75,000 for a single person $150,000 for a married couple.
Home Ownership Moves the Economy (HOME) Act of 2009: H.R.2801
- Extend the deadline from Dec 1st, 2009 to January 1st, 2011.
- Removes the requirements of being a first time buyer and leave it open to all home buyers purchasing a personal residence.
- Removing the income restrictions completely
This new act will be called “Home Ownership Moves the Economy (HOME) act of 2009 and if passed will relieve some competition out there in the marketplace because now people will not see it as urgent to get a deal closed by Dec 1, 2009. A lot of the bidding wars out there are due to the fact that people are out in droves not wanting to miss out on the tax credit. This will help some investors get those tough to get properties.