Currently, there's a $7500 tax credit for home purchases, but the credit must be repaid over the period of the loan. If the Senate measure becomes law, it would provide 10% credit, up to $15,000. Industry professionals back the measure as a means to spur the housing market.
The following is an excerpt from: http://tinyurl.com/ahy9rk
"Anyone who buys a home within a year of the bill's signature would qualify. And, consumers would be allowed to spread out the credit over two years. To deter speculators, buyers must occupy the house as their main residence for at least two years.
But the tax incentive is likely to be more helpful to buyers in less expensive markets, said Christopher Thornberg, a principal with Beacon Economics in Los Angeles. "Unfortunately, in the places that are most hard-hit, like California, it's going to have less of an impact," he said.
A tax break passed last summer provides a $7,500 credit to first-time homebuyers. But that must be repaid over 15 years, and the impact on home sales has been negligible.
Buyers will still face tight lending standards, and mortgage rates have climbed since hitting a record low of 4.96 percent last month. The average rate on a 30-year fixed mortgage rose to 5.25 percent this week from 5.1 percent last week, mortgage finance company Freddie Mac said Thursday."
Associated Press Writers Daniel Wagner and David Espo in Washington, and Alex Veiga in Los Angeles contributed to this report.
Copyright © 2009 The Associated Press. All rights reserved.
Marianne Snygg, GRI, ABR, ASP
ERA Herman Group Real Estate
Colorado Springs and Monument Real Estate