$7500 Tax Credit

NAR wants to make the first-time buyers $7500 Tax credit available to all home buyers including first-time buyers and have the current repayment requirement removed. NAR also requested the credit be extended until the end of 2009. Currently, those that receive the First-time buyers tax credit must pay it back over 15 years. NAR is also still seeking a mortgage interest-rate buydown and improved foreclosure mitigation programs.

The $7500 tax credit hasn't lured many buyers into the market. Removing the repayment requirements will help buyers enter the market and stimulate home sales, shrinking the housing inventory and in turn stabilize home values according to the National Association of Realtors president, Charles McMillan.

$7500 Tax Credit

Will the $7500 Tax Credit require repayment?

Currently, First Time Buyers that qualify for the $7500 Tax Credit must repay the amount over 15 years.  Part of President Obama's $825 billion bill unveiled last thursday 01/15/09, allows for the $7500 to be given without repayment as it currently stands.

The goal is for the House to vote on the bill 01/28 and the Senate shortly after where some changes are expected prior to the bill being enacted sometime in mid-February.  

Providing much needed assistance to 1st Time Buyers will encourage buyers to move forward with a purchase. However, providing funds after a purchase doesn't help buyers who are unable to obtain financing because of a lack of a down-payment. Allowing the $7500 to be used as a down-payment and/or for closing costs would greatly assist buyers obtain financing at historically low rates. To date, many buyers have been unable to move forward with a purchase and allowing funds to be used in this manner will be good news for the general economy.