Congress Sweetening The $7,500 Home-Buyer Tax Credit?

Jan 27, 2009

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Since it was announced in late 2008, the $7,500 home-buyer tax credit has received mixed reviews, mostly because as it currently stands, it has to be fully repaid in 15 years. So basically, it’s an interest-free loan (not such a bad thing in itself), rather than a true tax credit.

Good news though… apparently, the new economic stimulus proposal before Congress contains what could be some positive adjustments to this program, maybe removing the repayment rule.

It may or may not make it through House and Senate negotiations, but if it does, I’m pretty sure this would be an additional shot in the arm of the national real estate market, so stay tuned for updates.

While you're here, don't miss these posts:

Home Buyer Tax Credit Push Still On Home Builders, Realtors and Bankers continue to urge Congress to extend the home buyer tax credit, and from what I see day-to-day, there’s no shortage...
Home Buyer Tax Credit Qualifications We get a lot of questions about who does and doesn’t qualify for the Home Buyer Tax Credit, so why not put it out here...
Housing Stimulus 2.0 – Is It The Solution? A little over a week ago, I mentioned that Congress was hinting at sweetening the home buyer tax credit a bit, and it appears now...

6 Comments

Housing Tax Credit

3 Comments

Tom E. Snyder • Jan 28, 2009 @4:35 am

Excess demand for houses is what got us into this mess. Encouraging demand will get us out?
ARDELL • Jan 28, 2009 @6:16 am

Hi Ryan,

I do think $7,500 as part of a stimulus package that starts at the END of this one, would be good.

But to change the loan to a credit now would not stimulate anything. The people already bought the houses, so for the government to not get the money back as intended, would be like the government throwing money down the toilet.

It clearly can't "stimulate" more people to buy "last year" to do that. It's pretty much a stupid idea.

Now if they want to put it in place in April of 2009, when this package is up, I would support that.

To comment #1 I'd say, given the criteria to get a loan has gotten so much tighter, I don't think the stimulus is part of the problem. I do think it is an appropriate part of a solution.

ARDELL's Recent post…http://www.raincityguide.com/2009/01/27/ruin-sity-ga...target=”_blank”>Ruin Sity Gaide
rhukill • Feb 3, 2009 @6:09 pm

All great points, indeed. I agree that changing the current plan wouldn't do much to stimulate, and implementing a new program would be the way to go, if anything's going to be changed.

I don't really have a problem with stimulus programs that will encourage those who can qualify to buy, as long as we don't go back to the reckless lending practices of the past 5 years or so. We want to encourage buying in a fiscally-responsible manner.