Billings, MT

here is the actual language in the bill extending and expanding the home buying tax credit

SEC. 11. EXTENSION AND MODIFICATION OF FIRST-TIME HOMEBUYER TAX CREDIT.

(a) Extension of Application Period-

(1) IN GENERAL- Subsection (h) of section 36 of the Internal Revenue Code of 1986 is amended--

(A) by striking `December 1, 2009' and inserting `May 1, 2010',

(B) by striking `Section- This section' and inserting `Section-

`(1) IN GENERAL- This section', and

(C) by adding at the end the following new paragraph:

`(2) EXCEPTION IN CASE OF BINDING CONTRACT- In the case of any taxpayer who enters into a written binding contract before May 1, 2010, to close on the purchase of a principal residence before July 1, 2010, paragraph (1) shall be applied by substituting `July 1, 2010' for `May 1, 2010'.'.

(2) WAIVER OF RECAPTURE-

(A) IN GENERAL- Subparagraph (D) of section 36(f)(4) of such Code is amended by striking `, and before December 1, 2009'.

(B) CONFORMING AMENDMENT- The heading of such subparagraph (D) is amended by inserting `AND 2010' after `2009'.

(3) ELECTION TO TREAT PURCHASE IN PRIOR YEAR- Subsection (g) of section 36 of such Code is amended to read as follows:

`(g) Election To Treat Purchase in Prior Year- In the case of a purchase of a principal residence after December 31, 2008, a taxpayer may elect to treat such purchase as made on December 31 of the calendar year preceding such purchase for purposes of this section (other than subsections (c), (f)(4)(D), and (h)).'.

(b) Special Rule for Long-time Residents of Same Principal Residence- Subsection (c) of section 36 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

`(6) EXCEPTION FOR LONG-TIME RESIDENTS OF SAME PRINCIPAL RESIDENCE- In the case of an individual (and, if married, such individual's spouse) who has 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, such individual shall be treated as a first-time homebuyer for purposes of this section with respect to the purchase of such subsequent residence.'.

(c) Modification of Dollar and Income Limitations-

(1) DOLLAR LIMITATION- Subsection (b)(1) of section 36 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

`(D) SPECIAL RULE FOR LONG-TIME RESIDENTS OF SAME PRINCIPAL RESIDENCE- In the case of a taxpayer to whom a credit under subsection (a) is allowed by reason of subsection (c)(6), subparagraphs (A), (B), and (C) shall be applied by substituting `$6,500' for `$8,000' and `$3,250' for `$4,000'.'.

(2) INCOME LIMITATION- Subsection (b)(2)(A)(i)(II) of section 36 of such Code is amended by striking `$75,000 ($150,000' and inserting `$125,000 ($225,000'.

(d) Limitation on Purchase Price of Residence- Subsection (b) of section 36 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

`(3) LIMITATION BASED ON PURCHASE PRICE- No credit shall be allowed under subsection (a) for the purchase of any residence if the purchase price of such residence exceeds $800,000.'.

(e) Waiver of Recapture of First-time Homebuyer Credit for Individuals on Qualified Official Extended Duty- Paragraph (4) of section 36(f) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

`(E) SPECIAL RULE FOR MEMBERS OF THE ARMED FORCES, ETC-

`(i) IN GENERAL- In the case of the disposition of a principal residence by an individual (or a cessation referred to in paragraph (2)) after December 31, 2008, in connection with Government orders received by such individual, or such individual's spouse, for qualified official extended duty service--

`(I) paragraph (2) and subsection (d)(2) shall not apply to such disposition (or cessation), and

`(II) if such residence was acquired before January 1, 2009, paragraph (1) shall not apply to the taxable year in which such disposition (or cessation) occurs or any subsequent taxable year.

`(ii) QUALIFIED OFFICIAL EXTENDED DUTY SERVICE- For purposes of this section, the term `qualified official extended duty service' means service on qualified official extended duty as--

`(I) a member of the uniformed services,

`(II) a member of the Foreign Service of the United States, or

`(III) an employee of the intelligence community.

`(iii) DEFINITIONS- Any term used in this subparagraph which is also used in paragraph (9) of section 121(d) shall have the same meaning as when used in such paragraph.'.

(f) Extension of First-time Homebuyer Credit for Individuals on Qualified Official Extended Duty Outside the United States-

(1) IN GENERAL- Subsection (h) of section 36 of the Internal Revenue Code of 1986, as amended by subsection (a), is amended by adding at the end the following:

`(3) SPECIAL RULE FOR INDIVIDUALS ON QUALIFIED OFFICIAL EXTENDED DUTY OUTSIDE THE UNITED STATES- In the case of any individual who serves on qualified official extended duty service (as defined in section 121(d)(9)(C)(i)) outside the United States for at least 90 days during the period beginning after December 31, 2008, and ending before May 1, 2010, and, if married, such individual's spouse--

`(A) paragraphs (1) and (2) shall each be applied by substituting `May 1, 2011' for `May 1, 2010', and

`(B) paragraph (2) shall be applied by substituting `July 1, 2011' for `July 1, 2010'.'.

(g) Dependents Ineligible for Credit- Subsection (d) of section 36 of the Internal Revenue Code of 1986 is amended by striking `or' at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting `, or', and by adding at the end the following new paragraph:

`(3) a deduction under section 151 with respect to such taxpayer is allowable to another taxpayer for such taxable year.'.

(h) IRS Mathematical Error Authority- Paragraph (2) of section 6213(g) of the Internal Revenue Code of 1986 is amended--

(1) by striking `and' at the end of subparagraph (M),

(2) by striking the period at the end of subparagraph (N) and inserting `, and', and

(3) by inserting after subparagraph (N) the following new subparagraph:

`(O) an omission of any increase required under section 36(f) with respect to the recapture of a credit allowed under section 36.'.

(i) Coordination With First-time Homebuyer Credit for District of Columbia- Paragraph (4) of section 1400C(e) of the Internal Revenue Code of 1986 is amended by striking `and before December 1, 2009,'.

(j) Effective Dates-

(1) IN GENERAL- The amendments made by subsections (b), (c), (d), and (g) shall apply to residences purchased after the date of the enactment of this Act.

(2) EXTENSIONS- The amendments made by subsections (a), (f), and (i) shall apply to residences purchased after November 30, 2009.

(3) WAIVER OF RECAPTURE- The amendment made by subsection (e) shall apply to dispositions and cessations after December 31, 2008.

(4) MATHEMATICAL ERROR AUTHORITY- The amendments made by subsection (h) shall apply to returns for taxable years ending on or after April 9, 2008.

SEC. 12. PROVISIONS TO ENHANCE THE ADMINISTRATION OF THE FIRST-TIME HOMEBUYER TAX CREDIT.

(a) Age Limitation-

(1) IN GENERAL- Subsection (b) of section 36 of the Internal Revenue Code of 1986, as amended by this Act, is amended by adding at the end the following new paragraph:

`(4) AGE LIMITATION- No credit shall be allowed under subsection (a) with respect to the purchase of any residence unless the taxpayer has attained age 18 as of the date of such purchase. In the case of any taxpayer who is married (within the meaning of section 7703), the taxpayer shall be treated as meeting the age requirement of the preceding sentence if the taxpayer or the taxpayer's spouse meets such age requirement.'.

(2) CONFORMING AMENDMENT- Subsection (g) of section 36 of such Code, as amended by this Act, is amended by inserting `(b)(4),' before `(c)'.

(b) Documentation Requirement- Subsection (d) of section 36 of the Internal Revenue Code of 1986, as amended by this Act, is amended by striking `or' at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting `, or', and by adding at the end the following new paragraph:

`(4) the taxpayer fails to attach to the return of tax for such taxable year a properly executed copy of the settlement statement used to complete such purchase.'.

(c) Restriction on Married Individual Acquiring Residence From Family of Spouse- Clause (i) of section 36(c)(3)(A) of the Internal Revenue Code of 1986 is amended by inserting `(or, if married, such individual's spouse)' after `person acquiring such property'.

(d) Certain Errors With Respect to the First-time Homebuyer Tax Credit Treated as Mathematical or Clerical Errors- Paragraph (2) of section 6213(g) the Internal Revenue Code of 1986, as amended by this Act, is amended by striking `and' at the end of subparagraph (N), by striking the period at the end of subparagraph (O) and inserting `, and', and by inserting after subparagraph (O) the following new subparagraph:

`(P) an entry on a return claiming the credit under section 36 if--

`(i) the Secretary obtains information from the person issuing the TIN of the taxpayer that indicates that the taxpayer does not meet the age requirement of section 36(b)(4),

`(ii) information provided to the Secretary by the taxpayer on an income tax return for at least one of the 2 preceding taxable years is inconsistent with eligibility for such credit, or

`(iii) the taxpayer fails to attach to the return the form described in section 36(d)(4).'.

(e) Effective Date-

(1) IN GENERAL- Except as otherwise provided in this subsection, the amendments made by this section shall apply to purchases after the date of the enactment of this Act.

(2) DOCUMENTATION REQUIREMENT- The amendments made by subsection (b) shall apply to returns for taxable years ending after the date of the enactment of this Act.

(3) TREATMENT AS MATHEMATICAL AND CLERICAL ERRORS- The amendments made by subsection (d) shall apply to returns for taxable years ending on or after April 9, 2008.

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:

• Extends 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 a $6,500 credit to current home owners purchasing a new or existing home between the date the bill is signed by President Obama 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.

Latest news:
Tax Credit Extension a Positive Step Toward Real Estate Recovery (Nov.5)
President's Podcast: Tax Credit Extended (Nov. 5)

Who Qualifies for the Extended Credit?

• First-time home buyers who purchase homes between the date the bill is signed by President Obama and April 30, 2010.
  
• Current home owners purchasing a home between the date the bill is signed by President Obama 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 or your client purchased a home between January 1, 2009 and the date the bill is signed by President Obama, 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 credit allowed for current homeowners is $6,500.

How is a Buyer's Credit Amount Determined?

Each home buyer's tax credit is determined by tow additional factors:

1. The price of the home.
2. 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 the date the bill is signed by President Obama 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 or your client purchased a home between January 1, 2009 and the date the bill is signed by President Obama, 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.

Senate Approves Homebuyer Tax Credit Extension

By JACOB GAFFNEY
November 4, 2009 10:44 PM CST

The Senate voted today to pass an extension of the first-time homebuyer tax credit until April 2010.

In all, 98 Senators voted in favor of H.R. 3548, with zero votes against (two Senators did not vote). H.R. 3548 is a bill is primarily purposed with extending unemployment benefits.

The bill is currently amended to include the extension of an $8,000 tax credit for those buying their first homes as well as an $6,500 tax credit for some borrowers buying a home for a second time.

The move comes as no surprise, as HousingWire reported last week. The bill now requires President Obama's signature into law.

Business Roundtable, an association of CEOs of leading U.S. companies, with nearly $6trn in annual revenues and more than 12m employees, commended the vote in a statement.

"This critical program has already enabled hundreds of thousands of Americans to become first-time homebuyers," they report.

"Encouraging additional home purchases will create a cascade effect, not only boosting the housing sector, but also creating jobs and hastening broad recovery of the U.S. economy - more than 20 percent of which is tied to residential real estate and housing-related industries."

Passed as an amendment, the tax credit can still be removed from the final wording of the bill, if placed under further review. However given recent lobbying efforts in the industry and a feeling of presidential support, this remains unlikely.

Below are the numbers for Yellowstone County for the first ten months of the year. If anyone had any doubt giving people an $8,000 tax break would affect people's behavior the numbers below should put that thought to rest. Things of note as we have progressed through the year we have steadily gained on our short fall of closed transaction compared to last year. The 79% above last year for pending sales of you can thank the $8,000 tax credit for that huge increase. When you look at sales price decline with size factored in my comment is about a 3% decline in pricing to put that into perspective the market has been flat since 2007. Not bad if you compare a 50% statewide drop in home values in California in the same time period, heck Las Vegas dropped 33% just from 2008 September to 2009 September. Another item to note is by definition first time buyers are rents and you can see the impact of them buying homes in the rental softness in pricing and increase availability.

Since it seems that Washington dc will pass an extension and expansion of the tax $8,000 for first time buyers $6,500 for person moving from a home they have owned for five years get ready for the after burns to kick in till reach altitude than flame out and head back for a crash landing.

Market update at glance	10/31/2009	Year	Percentage Increase
Yellowstone County		2008	2009	or -Decrease
Residential Closed Sales Units		1738	1632		-6%
Residential Pending Sales Units	167	299		79%
Residential Active Property Units For Sale	876	844		-4%
Average sales price Single family Home	$209,697	$201,222		-4%
Average Square feet Single family Home	2326	2272		-2%
Median sales price Single family Home	$186,070	$181,200		-3%
Median Square feet Single family Home	2214	2160		-2%
Average Days on Market Till Offer Received
Single Family Home			60	65		8%
Absorption rate -	TIME IN DAYS
Time it would take for all existing		171
properties to sell with no new inventory coming
into the market place - residential
SINGLE FAMILY PERMIT ISSUED MONTH	16	21		31%
SINGLE FAMILY PERMIT ISSUED YEAR	243	199		-18%
Average Number of Rentals Advertised Sundays	301	393		31%
Average Asking Price for a Rental Home	$1,114	$1,035		-7%
Average Asking Price for a Rental Apartment	$678	$673		-1%

Foreclosures Growing in Suburbs and Secondary, says RealtyTrac

By JON PRIOR
October 30, 2009 11:53 AM CST

Foreclosures are beginning to flare up in suburban and secondary metro markets for Q309, according to a report from RealtyTrac.

Dramatic increases in foreclosures from a year ago came in suburban areas previously believed to be more stable, such as Boise, Idaho, up nearly 22% from Q209. Another area, Provo, Utah, is located a distance of 45 miles outside Salt Lake City and rose nearly 11% in the same period. RealtyTrac provides an online marketplace for foreclosure properties with more than 1.5m default, auction and REO listings.

In several states, foreclosure activities drifted toward new focal points, such as smaller towns with previously self-sustaining industries. Chico, California in Sacramento Valley, and agricultural hub, had a 98% increase in foreclosures from Q308, according to the report.

The Las Vegas metro area had the highest percentage of foreclosures among its housing units with 5.13% in Q309. Merced, Calif. - west of San Jose - had a 3.72% foreclosure rate, and Cape Coral - Fort Meyers, Fla. came in third with 3.67% of homes sliding into foreclosures, according to the report.

"You're moving from Phoenix to Prescott, you're moving from Las Vegas to Reno," Rick Sharga, the vice president of marketing at RealtyTrac, told HousingWire. "You are seeing that migration into secondary markets. You're also seeing a migration into formerly stable areas and areas that have been wracked by unemployment."

Cities in California, Florida and Nevada accounted for the 10 highest foreclosure rates in Q309 among metro areas with more than 200,000 people. However, five of those cities reported decreasing foreclosure activity from Q308, offset by many other markets reporting spikes in foreclosures, according to the report.

Sharga sees the foreclosure crisis coming in three waves, and with this new data, the market is showing signs of the second one.

"That first wave of foreclosures cratered the economy, which created job losses, which created the second wave. Now, we're seeing prime rate loans affected by unemployment. And the third wave will be really a repeat of wave one, except this time we're going to see a switch of Option ARM and Alt-A loans out for the subprime loans. It will probably be as big but somewhat shorter lived," Sharga said.

Sharga said that he expects a peak in foreclosures in 2010, only a marginal improvement in 2011 and a return to normal monthly foreclosure activity sometime in 2012.

"Rising unemployment and a new variety of mortgage resets continued to gradually shift the nation's foreclosure epicenters in the third quarter away from the hot spots of the last two years and toward some metro areas that had avoided the brunt of the first foreclosure wave," said James J. Saccacio, chief executive officer of RealtyTrac. "While toxic subprime mortgages drove much of that first wave of foreclosures, high unemployment and exotic Alt-A Option ARMs are spreading the foreclosure flood to more metro areas in 2009."