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April 24th, 2010
02:56 AM ET

Is the Tax Credit Over?

From housing and finance expert Clyde Anderson:

It's been a huge boost to the housing market, but it's almost over. Yes I'm talking about the now famous Housing Tax Credit made available by the Obama Administration. It's been a great ride, but as the saying goes, "All good things must come to an end." The question a lot of people are asking…Will the government extend it?

Potential homebuyers have the opportunity to receive an $8,000 incentive to purchase a home if they were a first time buyer, while $6,500 was made available for repeat buyers were both designed to help provide a renewed sense of homeownership. Both were designed to stimulate the housing market and it succeeded in doing just that. The program aided many people that were on the fence about purchasing view the tax credit as that nudge that pushed them over into the land of homeownership.

The tax credit was designed to give homebuyers who sign a property contract prior to April 30, 2010 and close prior to June 30, 2010 a huge incentive. The big questions as of lately is how do I get my money? Well, when you file your 2009 taxes you should include a copy of your HUD-1 Settlement Statement and complete the IRS form 5405. The IRS will send you a check for the amount of the credit you qualified for based on your housing ownership status. Uncle Sam will then send you a check for the amount of the credit you qualified for $8,000 or $6,500. If you have filed tour 2009 Tax Returns already you can file an amended return to show that you have actually purchased and closed on a property in order to get your credit this year.

It's a great incentive to get a check from the government for do something you have been debating about for years or better yet, for doing something you were going to do anyway. I caution buyers not to use the tax credit as the main thing to help them decide to buy or cause them to feel rushed to purchase in fear that they are going to miss out on the funds. Remember, you will still be paying for the maintenance, upkeep, mortgage, insurance on that property that far exceeds the tax incentive over time.

Watch for Clyde Anderson's Home School segments Saturday mornings with TJ Holmes in the CNN Newsroom.

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soundoff (14 Responses)
  1. Carl

    Things are better but far from being out of the recession. This credit was not a gift as your question suggests. It was a necessary tool to help people suffering in this down turn and improve the economy overall.. "Extend" would be my vote at least through one more cycle.

    April 24, 2010 at 7:49 am |
  2. Scott Stodden

    I always thought TJ that the Home Tax Credit was a great program to encourage first time home buyers to buy a home and for former homeowners to buy another home but if this runs out and they don't extend it then what happens to the housing market? Do we go back to where we started? I mean if we don't have money to fund our schools then what do we do?

    Scott Stodden (Freeport,Illinois)

    April 24, 2010 at 10:13 am |
  3. Dee

    Since this credit seems to have been a successful program, I certainly hope the government will extend it. The only things that I think will get our economy going again is (1) new jobs and (2) an upturn in the housing market.

    So, I hope the government will realize that at least one program seems to be working, and keep it around at least until the end of the year.

    April 24, 2010 at 12:20 pm |
  4. corey d

    Everyone says it should end. Well good for all you people who already got your check, how about people like my wife and I who have put in 5 offers in on 5 different homes since january. We still do not have an accepted offer for one reason or another. Mostly banks taking 2,3 or at worst 5 weeks to tell us no. Mainly on account of people who never bothered to talk to a bank before putting in an offer and out bid us by 1000 or less. The bank wanted to wait and see if those people could get financed instead of going with a buyer who they know could close a loan. We were going to free up an extra 200 a month with that money by paying off debt. But the credit criminals who have bought houses they can't afford get 8000 to blow on whatever they want. God bless america, and the retarded system we are forced to work with. I know most of you don't think 8000 is a big deal, then u have no right to tell me how right or wrong I am. Try living in the america I do.

    April 25, 2010 at 4:15 pm |
  5. TLG

    They need to extend it until the end of 2010. The housing market is still down, as many people know alot of people just start looking in the spring for properties. Why stop it now. KEEP IT GOING!!!!!!

    April 26, 2010 at 11:10 am |
  6. Trish Waldron

    I hope they keep it going because we want to buy and use the tax credit for remodeling on what needs to be done.We have been waiting on a job transfer to Fl. and it is just now coming.Need just a little bit more extension if just until end of summer so we can look and buy .

    April 26, 2010 at 7:05 pm |
  7. MTC

    i bet that everyone who thinks the tax credit should end already have their own HOMES or are upset that they cannot get in on the deal themselves. selfish, selfish people!

    April 26, 2010 at 10:15 pm |
  8. Jason

    I am just graduating college and won't be starting a job until June. My wife and I want to buy a house before the tax credit expires, but we can't. I'd be nice to be able to take advantage of the tax credit. It would certainly motivate us to buy a house sooner rather than later. If the tax credit expires I think we'll just wait it out and see if it is brought back later this year.

    April 28, 2010 at 1:21 pm |
  9. Natalie

    I sure hope the tax credit extend until the end of the year because you have mortgage company taking their time to process application then you have to wait on the bank to respond back and that takes forever. This is one of the reason I decided to build a home and no $8000 is not a lot of money when you have a mortgage note for 30 years and property tax to pay but it is a lot of money when it helps give a boost and yes it would be great to extend and keep the home industry climbing and rising.

    April 28, 2010 at 3:09 pm |
  10. AT

    The tax credit SHOULD be extended until the end of 2010! It has proven to boost the housing market. I am a travel nurse trying to relocate and purchase a home. I have two steady jobs, an awesome credit score, and money in the bank but cannot get a mortgage because I do not have permanent employment in the area that I am moving! I TRAVEL for a living! I need more time to establish "permanent" employment in the area I so desire to live. Please extend the credit!!!!!

    April 28, 2010 at 10:23 pm |
  11. Jennifer

    I think the tax credit should be extended! My husband and I saved money for a down payment for the last two years since we got married. Been to the bank and have been approved. We have found houses and lost out on viewing them due to the realtors in my area are complete lazy asses!!! If you don't purchase the first one they show you then tough luck. We only got to view 12 homes in 6 months. That is ridiculous!!! We need more time to find a realtor that will help and work for their money!

    April 28, 2010 at 10:25 pm |
  12. Vince in Scottsdale, AZ

    Please please please... let this tax credit expire! The tax credit is only artificially inflating home prices and preventing the market from reaching it's true equilibrium. BTW I am also a first time home buyer and have been waiting 3.5 years for the market to settle before buying. Extending the credit only prevents the market from reaching the true "bottom" of the market and thus the smart money will continue to wait that much longer. The more you delay the natural market forces the longer this recession will last. Does it really make sense for someone like myself to buy today with an $8,000 tax credit or wait 3-9 months for prices to drop another $25K-$35K without a tax credit?

    April 29, 2010 at 4:33 pm |
  13. rambo silver spring

    i would like to have this 8000 tax credit but this tax credit is not really helping frist time home buyers. i think home sellers benefited and kept prices high. please dont extent this credit so the rich J can get richer and the poor poorer.

    April 30, 2010 at 11:57 pm |
  14. cal in york pa

    Vince,

    You are clueless on Real Estate; This Federal Program is linked to a Pa State Program which allows first time home buyers off all ages, walk of life to receive a $5000 Tax Advance from PHFA to buy the home. In most cases, good, solid borrowers (credit scores 600-650) with 2 year plus on their jobs, back end debt to income ratios of under 40% buy a nice renovated home with less than $1600 out of pocket. They receive a Fixed Rate 4.95 30 year mortgage from PHFA and can easily afford home ownership for the equivalent of the previous rent payment.

    So, now the $8000 tax credit is gone hundreds of would be first time buyers are out of the market due to limited down payment money.

    These are the facts, I renovate and remarket 130-150 homes per year, spend in excess of $50,000 per month at our local Lowes, employ 30-45 Sub-Contractors with work, Local insurance Companies with Clients, Provide a Large Local Bank 150+ borrowers per year, Law Firms Settlements and all the while I'm buying homes for 20-30% less than 3 years ago and retailing back to the end users at the same margin.

    I teach Real Estate Investment and practice it EVERY day, so if you need the facts, contact me or any of my 700+ clients.

    You've got it wrong.

    We need this program back or another version that will help the average person not the Millionaires.

    May 1, 2010 at 6:29 am |