First-Time Home Buyer Tax Credit May Be Extended into 2010

Congress is telling us there's a chance....that the first-time home buyer tax credit will be extended to April 2010. The credit, which gives first-time home buyers up to an $8,000 credit on the purchase of a home, expires at the end of the month. The program has been instrumental in the slow, but positive turn in the housing market in Iowa and across the nation.

According to a report this week from the National Association of Realtors (NAR), key Senators have agreed to not only extending the existing credit, but also offering a new $6,500 credit for existing homeowners who have lived in their current residence for a consecutive five-year period in the past eight years. Under the terms of the new extension, home buyers must be under contract by April 30, 2010, and close before July 1.

It's not a done deal yet, though. The extension reportedly has support from President Obama, but according to the NAR report, "House Democrats have expressed concern about the cost of the tax credit for government, and allegations of abuse have resulted in an IRS probe of the program."