Does "after the enactment of this act" mean when it's voted on or December 1? I close late November and I was hoping to take advantage of the higher income limits.

I have major mixed feelings about this legislation. I hate the government propping up another industry and basically giving money away to people that were probably going to buy anyway without the credit. The last credit seems to have stabilized the markets a little, but we can’t just keep artificially prop up markets all day. I understand what they are trying to do, but we can’t just keep blowing money and with all the fraud I’ve heard about with this last credit it makes me even angrier.

I also don't like that these credits will assist people in "stretching" for a new home. This may get people that probably shouldn’t be buying homes into homes they can’t afford (sound familiar?). Stabilizing home prices is good overall, but I think this is going to be a HUGE cost. As a homeowner I like this credit (I just want to move!), but as a concerned taxpayer I despise it dearly.

Mary, I don't know the answer. I doubt we'll have clarity until (if) the House passes something and the two versions are reconciled.

The tax credit is just a substitution for the down payment assistance program that was taken away a year ago. The DPA was a major reason why values went up because it was included in the purchase price to compensate for the seller paying the "non profit". The tax credits is just another loophole to provide assistance for those who want to buy a home, except this time around, it is coming from the Gov't and not the seller.

Fannie Mae Desktop Underwriter has been approving loans with DTI's up to 60%!!!!! I am not sure when the changes will take place, but some time in the very near future, 43% DTI will be the max. This will pressure home prices down even further. I am afraid to say, that the bottom has not hit yet. When the DTI changes take effect, less people will qualify and they will need to find a lower priced home.

"With a 98 to 0 vote Wednesday, the Senate passed legislation to extend the credit for first-time buyers and add a credit for certain repeat buyers. It's expected to move to the House floor today."

About all that is left then is to hope that the House demonstrates better sense than the Senate has.

pro choice? ok
pro gay rights? ok
pro (meaningful) health care reform? ok
pro throwing more tax dollars on the bon fire? don't count on any of the other positions giving you coverage next November.

Jamie,
Thanks for searching for the exact language! I was just as frustrated as you because I could never find it, even after digging through the senate website.

Hopefully we will all know the answers to our questions in a few days

Enactment means after Obama signs it, which will PROBABLY be next week. So you should be fine. My wife and I are in the same position and we are scheduled to close on Nov 9th, so we probably need to move the date back to qualify.

I recently got married and bought a house and my wife is a first time home buyer but I am not. Will she receive the full tax credit, get half or nothing?

Dave, the answer seems to be "nothing." Here's what the IRS says: "Section 36(c)(1) of the Internal Revenue Code requires that the taxpayer and the taxpayer's spouse not have an ownership interest in a principal residence within the prior three years from the date of purchase."

Ryan, thanks for weighing in, and michaelP, I'm glad that helped!

Jamie thanks for your research. I'm sure there are 1,000's of differ scenarios, but what do you think about mine. I've owned a home in which I occupied from 2002 to 2005. I sold that home and purchased another home in 2005 in which I have occupied the entire time. We are now selling that home with a close date of 11/25/09. I plan to purchase another home in December. I've owned 2 homes and occupied the both 7 out of the last eight years. If I purchased after the enactment date do you think I would qualify? I'm sure there are many people with that same question. Thanks Jamie!

Paul, it doesn't look like you would qualify. Here's the language that seems to matter: "owned and used the same residence as such individual's principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence." (Emphasis mine.)

The NAR just issued a handout that says none of the changes take effect until December 1.

Paul: Do you agree with my analysis? My wife and I make about 175k combined and we are closing on Monday. Assuming Obama signs the bill tomorrow, we should qualify for the full 8k, right?

My CPA says that the new income limits won't take effect until Dec 1, the Realtor's association says the same, but I think the language of the bill says differently.

It's not that I think I'm smarter than them, but my Realtor keeps pushing me to push my closing date to December. She wants to know by tomorrow. UGH!

I called the IRS before to inquire about the limits, but they're no help right now as it's unsigned.

Ok, I just talked to a tax attorney and he said I'm read the bill correctly and the income limits go into effective when the bill is signed.

I guess that's at least one person on our team Ryan :-)

Ryan, my understanding is the income limits for 2 or more in the household that create income are capped at $150k to receive the tax credit. I'm not an expert of course and wouldn't want to advise you in any way regarding that. You'll need to check with IRS or a good CPA. There are more stipulations other than the income cap. I'm sure you are aware of those but make sure you familiarize yourself with them. If it meant delaying your closing 3 weeks to receive $8k tax credit then you'll want to make sure you do your research. On the other hand there can also be penalties to delaying your closing depending if it is new construction or pre owned. At point you would want to check with your builder or buyers agent. I am not a licensed professional. Good luck. Stay tuned into Jamie's blog site, she's in tune with this industry better than most! Thanks Jamie!

Hi, Mary -- the National Association of Realtors handout I found online actually says it'll go into effect as soon as it's signed. (There is a column labeled "December 1-April 30," but the sheet explains that the provisions in the column "become effective when President Obama signs the bill.")

I checked with a Senate contact and got the same answer -- when it's signed. That's expected Friday.

Thanks for the kind words, Paul Rizzo. I've been pulled in a bunch of directions lately, so I'm glad it doesn't show.

Okay...here's our scenario - My wife and I were married in October of '08, we purchased a home together in March of '09. I did not own a home since '04 and my wife purchased her small house in '05 which we rented out in March of '09 and she still owns. Is there any way we'll qualify for either?

I don't think so, stephen, but that's just my reading of it. You met the definition of first-time home buyer, but it sounds like your wife didn't, and that's the sticking point. (I assume she was living in her previous home until March?) And home purchases before the new bill is signed aren't eligible for the repeat-buyer credit, if I understand the bill correctly.

OK, who wants to help with my scenario?? My husband (who has never owned a home) and I currently have my house up for sale, and we are in the process of building a new home which we will close on in March 2010. I have owned my current home since late May 2005, and I also own another property which my parents occupy since March 2004. If we sell and close on the current house by March (at which point I will have owned it 4 years, 10 months), will we qualify since I have owned the other property since 2004? Or should we cross our fingers and hope it doesn't sell until the credit is set to expire? ARRRGGHH!!! Thanks in advance....

We closed on our new home on September 18, 2009. We have just rented our old home because we were unable to sell it. Will we be eligible for the repeat home buyer credit? Why can't they just approve it for any home purchased in 2009. Isn't that something that was done for the first-time homebuyer tax credit?

"But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions..."

ya'all are your own worst enemies.

http://en.wikipedia.org/wiki/Irrational_exuberance

I have the same question as Jamie Hopkins. Must homeownership be exactly 5 years to the day or do parts of calendar years count?

Chris, I'm pretty sure five years means 12 months times five, but no doubt the IRS will weigh in on this.

Hello
Thank you for giving such information because I also wonder that what what this "five consecutive years out of the last eight" really means.

So, if I sold a home in April that I was in for over 5 years and purchased another in May of this year, will this qualify for the 6500 tax credit. Will the government allow for all 2009 transactions. They should, versus to just allow those who do it from November to April. Its kind of biased for them to allow some to get the credit in 2009 versus others, that stepped up in a down economy and made a purchase. What do you think? Thx.