Congress Extends Homebuyer Tax Credit and Flood Insurance

The U.S. Senate passed two bills last evening previously passed by the House. Both bills still need President Obama's signature to become law, but that's expected to happen quickly.

Homebuyer Tax Credit
The Senate passed HR 5623, which extends the mandatory closing date to qualify for the homebuyer tax credit. The contract deadline does not change - homebuyers must have a contract signed by April 30, 2010 (an exception for active duty military) - but the previous closing deadline of June 30, 2010, has been extended to Sept. 30, 2010. The National Association of Realtors estimates that the approved bill will benefit more than 14,000 deals in Florida.

National Flood Insurance Program
Congress once again reauthorized a short-term extension for the National Flood Insurance Program to Sept. 30, 2010. The bill, HR 5569, makes the program retroactive to May 31, 2010, the date the program went on hiatus.

Tax Credit Extension Confirmed

As expected, President Obama signed H.R. 3548 this morning which, among other things, extended the $8,000 tax credit for first-time buyers into 2010.

“Florida residents enjoy two additional advantages,” says Florida Realtors Vice President of Public Affairs John Sebree. “The Florida Homebuyer Opportunity Program (FHOP), created by the Florida Legislature earlier this year, still has approximately $28 million that first-time homebuyers can access and use toward their downpayment. And move-up buyers now have the ability to ‘port’ their current property tax savings to a new home.”

Under the new law:

• A purchase must be under contract by April 30, 2010
• A purchase under contract by April 30 must close no later than June 30, 2010
• After Dec. 1, 2009, income limits rise to $125,000 for singles and $225,000 for married couples; up from limits effective through Nov. 30 of $75,000 for singles and $150,000 for married couples. The tax credit phases out incrementally at each $20,000 increase in income.
• Effective immediately: The maximum home value purchased cannot exceed $800,000. Prior to the law being signed, first-time homebuyers had no limitation on a home’s cost.

$8000 Homebuyer Tax Credit Extension Likely

This afternoon, the extended life of the $8000 first time home buyer credit looks like a "go" to extend it beyond its scheduled November 30th deadline! The extension was added as an amendment to an existing bill, HR 3548, that extends unemployment benefits. The U.S. Senate passed that bill on Wednesday and, after debate, the U.S. House passed HR 3548 this afternoon. It now needs only President Obama’s signature to become law, and the White House has indicated it will sign it, perhaps as early as tomorrow.

In addition to extending the tax credit for first-time homebuyers, the bill adds a smaller tax credit for homesteaded homebuyers who have lived in the house for five of the past seven years that are looking to make a move to a new home. This could bode well for those looking to relocate here to the Tampa Bay area and planning to sell their home up north. More about the $8000 First Time Home Buyer Credit.

The bill also increases the income limits of homebuyers from $75,000 (single) to $125,000; and from $150,000 (married) to $225,000. After the president signs the bill and extends the tax credit, the Florida Homebuyer Opportunity Program – a down payment and closing costs assistance program relating to the federal tax credit –automatically gets extended too. The state still has about $28 million available for homebuyers.*

The money is essentially a loan to first-time buyers; they receive it upfront, use it for a down payment or other costs, and pay it back once they get their federal refund.