Tax Credit To Be Extended!  Or Not, Or Modified, Or What?!?!

Ok, several websites later, I still don't know myself!  However, it does seem likely that the credit will be extended and modified to phase it out over the next year. 

In  a rider to the Unemployment Bill currently before the Senate, there seem to be several options on the table, and none of the news sites or blog destinations seem to agree on much.  Here's what I've seen:

1 - Credit will be extended through October of 2010, but will reduced by $2,000 every quarter, starting with a reduction to $6,000 on 1 January 2010 ($4,000 on April 1, $2,000 on July 1).

2 - Credit will be modified to 10 percent of the sales price, capped at $7,290.  In this modification, step-up buyers will also be able to use the credit - not just first timers.  These moving-on-up folks must have been in their previous home a minimum of five years.

3 - Credit extended as-is through March of 2010, then reduced $2,000 every three months - phased out by December of 2010 (similar to the 1st option).

4 - Raising the salary cap of the credit to $300,000 per family, $150,000 per individual (currently it's half that).  Also, remove the 1st time home buyer requirement and open the credit to all primary residence purchases.

As you can see, there are several options on the table, and this does not cover all of them.  Per Inman, Bloomberg, The Washington Post, and Jay Thompson (probably the best of the bunch - the Phoenix Real Estate Guy), a deal was reached among Senate Democrats last night to re-write the rider to the Unemployment Bill with the #3 option above. 

It seems likely the credit will be extended, but keep in mind this was only an agreement among Senate DEMOCRATS - it must still pass the Senate itself, the House, and the President.  More to come as I find out.

KW "This Month In Real Estate" -  With Great Tips On Purchasing Foreclosure Properties

Here's the October edition of "This Month in Real Estate" with Jay Papasan.  In addition to some national-level statistics and conditions, there's a short segment on purchasing foreclosure properties - with great tips on what to look out for:

I hope you enjoyed today's post - I'll be back to let you know how the whole tax credit deal works out once it's finalized.