As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:

Extended the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.
Here is more information about how the Extended Home Buyer Tax Credit can help prospective home buyers become part of the American dream. If you have specific questions or need additional information, please contact a tax professional or the Internal Revenue Service at 800-829-1040.

Recent news:
Who Qualifies for the Extended Credit?
First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.

Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

If you purchased a home between January 1, 2009 and November 6, 2009, please see: 2009 First-Time Home Buyer Tax Credit.

Which Properties Are Eligible?
The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?
The maximum allowable credit for first-time home buyers is $8,000.
The maximum allowable credit for current homeowners is $6,500.

How is a Buyer’s Credit Amount Determined?
Each home buyer’s tax credit is determined by two additional factors:
*The price of the home.
*The buyer’s income.
Price
Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income
Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you purchased a home between January 1, 2009 and November 6, 2009, please see 2009 First-Time Home Buyer Tax Credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?
Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

How do you think that the USA will react over the Federal Reserve cutting the rates by 0.5 percent to its all time lowest level of 1.5 percent in over four years. This drop is an attempt to try and improve the lending that keeps the U.S. economy moving forward.

Bank of America, Wells Fargo and other banks cut their prime rate by half a point to 4.5 percent, also the lowest in more than four years, after the Fed announced its decision early Wednesday.

For millions of Americans, the Fed’s cut means borrowing money becomes less expensive. Home equity loans, credit cards and other floating-rate loans all fluctuate depending on what the Fed does.

Following in step with USA, Central banks in England, China, Canada, Sweden and Switzerland and the European Central Bank, South Korea, Hong Kong and Taiwan also cut rates.

Today, the market (Wall Street) closed at its’ lowest since 2003 even though the Fed cut rates on Wednesday. Globally people are hoping for an upward change in the markets on Friday.

The Senate passed the 700 Billion dollar Bailout of Freddie Mac and Fannie Mae today.  I am curious if everyone out there knows what these companies do and why the Government stepped in to help out.

First, to help clear some of the confusion, these two companies are mortgage guarantors.  Fannie Mae was created back in the Great Depression by Roosevelt’s administration to back loans by private banks in order to make homeownership more assesible.  Years later the government allowed Fannie Mae to be privately managed. Freddie Mac was created by the government to keep Fannie Mae from becoming to big.

Fannie Mae and Freddie Mac guarantee more than $5 trillion in mortgages, almost half of those in the United States, With many of the mortgages defaulting, the companies are, in effect, bankrupt.  These two companies are such a large part of our financial system that failure of one or both would be detrimental Nationally and Globally.

This takeover was put in place to protect us, the taxpayer. How, well the U.S. government will be creating more demand in the marketplace by buying Fannie and Freddie mortgage bonds, homeowners and buyers should start seeing lower mortgage rates.  This may become one of the best times to purchase or refinance your home.