Homebuyer Tax Credit of $15,000 Proposed

Washington lawmakers have proposed several separate bills laced with housing incentives. The plans differ, but key elements include:

• Near doubling of tax credit. Sen. Johnny Isakson, R-Ga., has introduced a bill that would sweeten the current $8,000 homebuyer tax credit to $15,000. The bill has picked up a slew of co-sponsors, including Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee. 
• Expanded pool of eligible purchasers. Isakson also wants to allow "any buyer of any home" -- including move-up buyers and purchasers at every income level -- to claim the tax credit. Currently, the credit is restricted to first-time purchasers. Two House bills also propose expanding credit eligibility to all homebuyers.
• Extended tax credit deadline. Various proposals would keep the first-time homebuyer tax credit alive through at least mid-2010. Right now, the credit is scheduled to expire at the end of the year.
• New refinance tax credit. Rep. Kenny Marchant, R-Texas, has introduced a bill to give a $3,000 tax credit to homebuyers who refinance the mortgage on their primary residence. Marchant champions the credit as a free-market-friendly approach that helps people refinance "without picking winners and losers."

Mortgage consultant Michael Becker says he generally likes the policies under consideration.

"I am for any proposal that helps stop the bleeding when it comes to housing values," says Becker, who works for Green Pastures Mortgage and Finance in Lutherville, Md.

Mortgage pros weigh in

"Unemployment probably won't stabilize until next year, so extending the time frame for the tax credit would encourage more homebuyers to enter the market once the economy starts to recover," he says.

Other mortgage professionals agree the proposed legislation would likely provide at least a modest boost to mortgage activity.

"The more of this kind of thing Uncle Sam does, the sooner we'll get the overall supply of housing inventory down to a manageable level," says Mike Larson, a real estate analyst with Weiss Research in Jupiter, Fla.

Dick Lepre, senior loan officer at Residential Pacific Mortgage in San Francisco, says, "In the short term, any of these (proposals) helps the housing market."

"The greatest short-term benefit to the housing market would come from giving the largest possible tax credits to as large a group of buyers as possible," he says.

The proposed $3,000 tax credit for homeowners who refinance intrigues Brian Peart, president of Nexus Financial Group in Atlanta.

"I like it," Peart says. "(It) could help them to justify the closing costs."
Please Contact Thomas Ray for all your Real Estate Needs.
My Top Rated Site: www.LAexclusiveProperty.com
My Blog: www.RealEstateBlogLA.com