Good News for First Time Home Buyers!

The $790 billion stimulus package hammered out by House and Senate conferees and signed by the President increases the home buyer tax credit to $8,000, from $7,500, and drops the repayment feature for buyers who hold on to their property for at least three years. The three-year minimum holding period is a safeguard against speculators' use of the credit.

The legislation also extends the effective date of the credit to December 1 from June 30, and extends eligibility to borrowers who buy their home with the help of state or local financial assistance that comes from the proceeds of tax-exempt mortgage revenue bonds. The credit remains open only to first-time buyers (those who haven't owned in at least three years) and some income eligibility restrictions apply, but those are unchanged from the existing program. It starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000, and buyers will have to repay the credit if they sell their homes within three years.

With the tax credit, low interests rates, and sales prices down to their lowest point in years, it is a great time to buy!

For more information on the stimulus package provisions please click here!

Source: NAR, AP, Washington Post, New York Times, Bloomberg, USAToday, and Wall Street Journal.