The Housing Bill - the tax credit that is NOT a credit - a major flaw in the bill ?

Quite frankly - lower income earners generally receive tax refunds - so how would the tax credit help them if they're already not having to pay in on their taxes.

Am I missing something?

It is all about making sure the bill reads well in to the general public it does not have to be "smart" just exciting.

You can see through this sham.  You are smart beyond your years.  This is another BIG waste and you and I will be paying for it.  No one helped me with MY mortgage.  And are  Freddie and  Fanie both owned by the public?  Who do they rate our help?

I read this too.  It is appalling that the credit is really a loan that has to be paid back.

Chris & Stephanie: Here’s how it the “carrot” works according to USA Today…

“First-time home buyers who purchase a primary residence between April 9, 2008, and July 1, 2009, will be eligible for a tax credit of $7,500 or 10% of the purchase price, whichever is less.

On the surface, this looks like a pretty good deal. A tax credit is a dollar-for-dollar reduction in your tax bill, which makes it more valuable than a deduction. And this tax credit is refundable, which means you'll qualify even if your federal tax bill is less than $7,500, says Bob Scharin, senior tax analyst for Thomson Reuters. For example, a first-time home buyer who owes the IRS $2,000 would receive a refund of $5,500.

But this provision includes a lot of caveats, including:

•You'll have to pay it back. While this break has been labeled a tax credit, it's really an interest-free loan. Home buyers who claim the credit will be required to pay it back in equal installments over 15 years, starting in the second year after the home is purchased. If you buy a house this year and claim a $7,500 credit on your 2008 tax return, you'll have to pay an additional $500 a year in taxes for 15 years, starting in 2010.

If you sell your house before the 15 years has elapsed, you'll have to repay the entire balance, unless you sell at a loss.

•If your income exceeds certain thresholds, you're ineligible for the credit. The tax credit phases out for single taxpayers with adjusted gross income of $75,000 to $95,000. For married couples who file jointly, the phaseout is $150,000 to $170,000.”

http://www.usatoday.com/money/perfi/columnist/block/2008-07-28-housing-bill-tax-breaks_N.htm

Not many people will be able to take advantage of a tax credit anyway because they can't get a loan.  They need to do something to ease up the lending standards first.

I also found out that if you sell a home or refinance the home with in 5 years there are tax penalties.  This bill is a peice of junk!