The digital/internet press is heating up as we close in on the November 30th deadline to close a purchase and qualify for the FTHB tax credit.  In the office we’re slammed with purchase transactions that are heading for a mid-November closing and we couldn’t be more blessed.  However, there are still a good portion of our qualified borrowers who have yet to find a home.  We’ve heard both positive and negative news recently regarding an potential extension of the tax credit.

Yesterday I read the article, “Washington Report: $8,000 Home Buyer Tax Credit” which stated that President Obama, House speaker Nancy Pelosi and Senate majority leader Harry Reid met this past week to discuss a possible extension for military personnel serving overseas and that Reid is in support of a full extension and possible expansion of the tax credit.

Today I read an article, “Push on to expand $8,000 tax credit” from cnnmoney.com stating again that congress is considering an extension of the tax credit.

The tax credit is costly.  There are definite pros and cons for extending the credit.  Bottom line, we’re still seeing a rise in unemployment which results in increased mortgage defaults.  If the tax credit can help qualified buyers move towards homeownership we will all benefit from having the inventory of foreclosed homes shrink in 2010.

Good afternoon!  There is some solid evidence coming from the Senate this afternoon that a move to extend the tax credit is highly probable.  Updates to the extension/expansion/revision include:

• Increased income limits for eligible borrowers.
• $8,000 or 10% of the purchase price would remain the the credit for FTHB.
• $6,500 for home buyers who have lived in their home for 5 years and are selling to purchase again.
• Tax credit would expire April 30, 2010 with an additional 60 days to close (contract must be written prior to April 30th).

The proposal from the Senate will set the tone for discussion.  Please note, this does not mean it’s a done deal by any means.

Information courtesy of Bloomberg (click to see the entire article).