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$6,500 Tax Credit For Repeat Homebuyers! $8,000 Credit for 1st Time Buyers Will be Extended!

By
Mortgage and Lending with Providence Home Mortgage/ICCF

There's a lot of buzz that the first time home buyer credit of $8,000 may be extended. So far it's passed the Senate and now must pass through the House.

Some are saying it's helped the economy, some are saying it hasn't. I specialize in working with first time home buyers, and I can definitely say that business picked up for me personally all summer and this fall.

I found this  article online that spells out who the repeat homebuyer credit may work for. Basically, a repeat home owner would need to have owned their existing home for five years in order to qualify.

http://www.christianpf.com/6500-home-buyer-tax-credit-extended/

I see several pros and cons to extending this credit for repeat homebuyers.

Pros:

  • May lessen the blow of the inevitable loss many homeowners are facing when selling
  • Can help replenish down payment current homeowners are saving to trade up whereas repeat homeowners used to rely the proceeds from the sale of their homes to buy the next home
  • Can help replenish an Emergency Fund for the repeat homeowner so that if the unexpected happens, they haven't depleted their resources to buy the next home
  • Stimulates the housing economy
  • With more competition for homes, hopefully values will stop falling, start to go up a little

Cons:

  • Increases deficit
  • Perhaps a repayable tax credit that wouldn't burden our tax payers would have the same impact?

What do you think?

Edit:

The Senate voted Thursday, November 5th to pass the legislation! 

Comments (3)

Clayton Bonjean
Mainsail Realty Company - Santa Rosa Beach, FL
Broker | Owner | MBA

I believe in the tax credit.  The main issue with our economy is housing.  Also, many short sale deals that are currently in progress will probably go south if the tax credit is not extended and this will increase foreclosures.

Nov 03, 2009 02:52 AM
Danell Merren
Providence Home Mortgage/ICCF - Grand Rapids, MI

Great point! Thank you!

Nov 03, 2009 03:24 AM
Dave Sullivan
Real Estate One - Birmingham, MI
Michigan Realtor with an investor viewpoint

I wish this would come back!! we could use another shot in the arm for the housing market.. 

Jan 16, 2012 09:55 AM