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Senate Amendment to 2009 Stimulus Bill: First-Time Home Buyer Credit

This article was written by in Real Estate and Home. 105 comments.


This text refers to the original amendment to the stimulus bill, which has now been superseded in the final law. The first-time home buyer tax credit is now $8,000 and is available for people who purchase a house between January 1, 2009 and November 30, 2009. Here is how to claim the $8,000 home buyer tax credit on your 2008 or 2009 tax return.

30-year fixed rate mortgages at 4% aren’t the only the only benefits the Senate wants to offer taxpayers as it has the chance to shape the 2009 economic stimulus before the bill is sent to the Office of the President to be signed into law. A number of amendments are on the table, designed to address the housing market by encouraging people to start buying again.

Here’s another amendment under consideration.

Senate Budget Committee Chairman Kent Conrad, D-N.D., said last week he would propose an expansion of a temporary $7,500 first-time home buyer credit so that it applies to all purchases of primary residences. Some Republican senators have called for an increase in the credit to $15,000. (CNN)

The current law offers a tax credit of $7,500 to buyers purchasing their first home. The tax credit is a loan that must be paid back over the course of 15 years, starting two years after the credit is taken. It only is available for houses purchased between April 9, 2008 and July 1, 2009. Individuals earning above $75,000 (or couples earning above $150,000) will see the maximum credit phased out.

Without an amendment, the 2009 stimulus bill would remove the requirement that the credit be paid back over time, as long as the house isn’t sold within three years.

Buying a first home is one of the most difficult purchases to make. In addition to learning about all the requirements of owning a house for the first time, working with real estate agents, and in most cases, hiring lawyers, first-time home buyers need to raise money for the down payment and other fees. Purchasing subsequent houses are often less stressful, and money is often raised by sale of the first home. There are many programs to help first-time home buyers, but help more from the government might increase the possibility of a quicker recovery in the housing market.

February 13 Update: The Senate and House of Representatives have both passed the compromise version of the stimulus bill. Read the complete stimulus bill here, and you’ll be a step ahead of many of the congressmen who didn’t have a chance to read it before voting.

Updated February 25, 2009 and originally published February 2, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 44 comments… read them below or add one }

avatar velvet jones

People that are selling homes now are still trying to get as much as they paid for their homes between 2005 and 2007. A 4% mortgage is not going to help me here. I need the prices of homes to come down. Period. And I’m not buying anything until they do. The expectations of most sellers out there is out of control.

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avatar tom

This first time homebuyer credit is crap. I bought my first house in January 2008, do I get a credit? No. Can I afford my house? Yes. Such garbage.

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avatar Tia

I would have to agree with the poster velvet jones. I live in georgia and I’m currently looking for a home in the fairburn area and the community I visited this past weekend were priced in the high 400K. The prices are pretty much the same since they begin developing in late 2006, early 2007. The particular home I’m interested in was priced at 459K the have only come down 30K. The home is actually very overpriced and after looking at stats on zillow I found the home listing price is 118% higher than the average 4b/3bath home sold in the area in the past year.

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avatar cathy

…”The current law offers a tax credit of $7,500 to buyers purchasing their first home. The tax credit is a loan that must be paid back over the course of three years”…

I believe that the repayment period is 15 years.
http://www.federalhousingtaxcredit.com/faq.php

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avatar Luke Landes ♦127,550 (Platinum)

Cathy and Thomas: Thanks for pointing that out; I’ve fixed the information in the post above.

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avatar thomas

I think you have the home buyer credit information wrong. My understanding (since I’m actually getting it) is that it is a zero percent interest loan that has to paid over a 15 year period, not 3. Your payment, in the form of a tax, would not occur for two years.

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avatar Mr. GoTo

If they waive the repayment requirement (for sure), extend it to all home purchases (possible) and eliminate the income ceiling (unlikely), I will be buying a another home using this credit.

The more likely scenario is that my tax dollars will be used to fund this credit for others.

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avatar First Time HomeBuyer

What I don’t understand though is why they have changed the qualifying period for the homebuyer’s tax credit. Those that would qualify to NOT pay it back have to buy in 2009. The original credit included buyers after 4/9/08. Now they are getting not included for these changes? I purchased my home in 2008 during that qualifying period–So what about homebuyers like me? We’ve seemed to have fallen off somewhere.

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avatar Writer's Coin

Nice! I thought your last post was good news for a first-time buyer like myself, but things keep getting better and better!

If I had bought in 2008 and didn’t “need” help, I’d be pretty PO’d though….

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avatar Milo

I am torn on changing the credit for people purchasing in 2009. While I think it is great to allow people to get the credit. It seems inconsistent to allow people to have different treatment on the same first time home buyer credit, just utilizing in different tax periods.

I bought a house in the qualify period at the end of 2008 and will claim the credit on my taxes for 2008. I will have to repay that money over a 15 year period. The current ammendment will retroactively allow all those who have bought a home in 2009 to receive the same amount of credit (or possibly more) and not have to pay that amount back at all.

Wouldn’t it make sense to apply the changes retroactively to anyone using the credit? Why should there be different treatment for people utilizing the same credit but amended? While an argument could be made that those closing in 2008 did not need that added incentive, those who have already closed in early 2009 before the bill passage do not need the incentive either since they based there purchase on the original formulation of the credit. So why apply it retroactively at all? I realize that the bill has not been passed yet. But, no one has even filed there taxes yet for the 2008 tax year end.

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avatar Jodi

So will people who bought house in 2008 still have to repay the amount that they claimed on the first time home buyer credit?

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avatar paul

I purchased a house on the 31st of December because the FHA program was going to raise the down payment amount on Jan 1st. So I rushed through a closing as a result of a government signal, and now I’ll be a day off of getting the Full tax credit. I’ve emailed my Senators and I urge that anyone who see’s the cut off date as unfair do the same.

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avatar Charlotte

Why on earth are they making the date 4/09/08, if you bought a house in 2008 you should be able to take the tax credit. It doesn’t make sense….

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avatar Coop

I think it would be a good idea to make this tax credit retroactive 3-5 years back for first time homebuyers.

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avatar KAREN

Yes, seems we are out of it. Hey, they already have gotten our business!!!

Like a car lot, once the sale is over, ‘GOOD-BYE’!

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avatar Linzi

Hell, I bought my home on December 4, 2008! Three weeks later and I could have gotten $15,000. That could have allowed me to stimulate the local economy… not now, though.

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avatar joe

I think it should include all of 08. Are they saying that the people that bought there house in jan. feb. or mar. don’t need help. If they are they need to do some more research.

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avatar Seth

ME TOO! I bought in Dec 4, 2008 – I will be so upset if I miss out on $15k just because of 3 weeks. This is killing me.

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avatar snaps2721

Anyone know where all of the proposed or approved amendments can be read?

As for not getting the credit that is now being considered, well … let’s see

The day before I turned 18, the drinking age changed to 19 and the very next year it changed to 21!–couldn’t change my age.

Two months or so after I bought my second car, the same car’s price dropped 2,000 and the rate down a percent. I bought a chrysler last summer just before they had the “gas card program” so I lost out on that.

People who bought hybrid cars which became two years old before the tax credit was instituted did not get the first year’s tax credit.

I’m young enough now that my full SSS benefits will not start until I’m 72! Sure I can retire early and take a lesse amount but in order to get it in full upon retirement, I can’t retire until I’m 72.

Laws change all the time. Sometimes it may not seem fair If we miss the benefits, it sucks, but we can’t retro-activate everthing. Just life.

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avatar Luke Landes ♦127,550 (Platinum)

All of the amendments can be read on Thomas, the Senate’s online database. You can try this link for all current amendments to the bill presented to the Senate from the House. The link might expire; look for S.AMDT.98.

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avatar Jbh142

I clicked on the link to the amendments and can’t find the details of the amendment. Has anyone had any luck on finding the details of this bill.

My wife and I just bought our house in Aug of 2008 and we hope it will retroactive to some extent. We will see if she can sell it to me as the house was bought in her name.
15,000 is just to much to pass on.

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avatar interested

when does the buyer actually “see” this credit? The amendment includes the taxpayer’s choice of splitting the credit equally across two years. Is it after closing, or as a refund when you file your 2010 taxes?

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avatar snaps2721

Original Stimulus Plan Text

H.R.1, amendment 98

This is the initial text and does not have any amendments added since it’s initial introduction. The rest of the amendments made in the Senate are listed in blue links at the link stated above by Flexo.

Or copy and paste this in your browser.

http://thomas.loc.gov/cgi-bin/bdquery/z?d111:S.AMDT.98:

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avatar snaps2721

sorry, here’s the address of a page where you can link to the original Senate bill

http://www.huffingtonpost.com/2009/02/02/senate-stimulus-bill-full_n_163144.html

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avatar snaps2721

So we’ve found a lot of things. It is the buried stuff I’d like to locate. I’m looking for the break-out of the monies requested.

For instance the Frisbee Park, the Leashless Dog Park, the Coporate Hangers at the Fayettevill, AR, Airport–walmart and tyson can pay for their own.

It is those items, a bucket list, that has to be available and reviewed by the people.

We only have a tiny bit of time. Where is that information.

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avatar special k

Velvet Jones,
Get a grip with over 2 million homes in the USA that are Foreclosures, Tax Lein homes, Sheriff possession, or pre foreclosure I’m sure there has to be at least one home out there you could buy! Start looking at foreclosures!

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avatar dude35

Can someone clear this up for me?: If you are eligible for the 7500 credit/loan based on purchase of a home in 2008, do you have to pay it back now? Or, does the new legislation waive the pay back requirement?

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avatar scott b

I find it shocking and appalling that so many people are simply looking for what they are going to get from this new porkulus bill!

At the top of this comment section, someone from the ATL area was complaining that the price of a $459K home was ONLY down $30 k since 2007…..guess what honey, you CAN’T AFFORD a $459K house, that’s why you are not getting it. Do you have $90K to put down to qualify for a real mortgage, or are you just looking to live beyond your means like so many other people who have been foreclosed on?

Give me a break!!!

Suck it up people. Go get a second job. Give up Starbucks….or give up getting your nails done weekly….or give up you season tickets…..

It’s time we quit running around with our hands out looking for a freebie and start doing what the people that built this great country did….SACRIFICE!

Economic slowdowns ARE GOOD for the economy. The weak and poorly run companies should be allowed to fail. Success is not guaranteed. Jobs are not guaranteed. If your company sucks (the result of management and workers sucking) then that company and it’s workers should be out of work.

The strong, well run, well worked companies will always survive, and they will innovate, and work harder and produce more and better.

What the hell has happened to this country? When did we pack it in and become FRANCE?????!!!!!!!

This whole fiasco sickens me.

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avatar snaps2721

Do yu want to see the wish list for all the pork within this bill? This list is where the disc golf course and leashless dog park stuff came from. The US Mayoral Conference Mainstreet Economic Recovery.

Community parks, extending/enlarging armers market, repair of a cracked ceiling in a public city building, even more than a $1/4m for A Traffice Signal! and on and on.

344 pages of stuff from ALL states.

http://www.usmayors.org/mainstreeteconomicrecovery/documents/mser-report-200901.pdf

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avatar snaps2721

THANK YOU SCOTT B!

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avatar Luke Landes ♦127,550 (Platinum)

Snaps: the list you’ve linked to is not included in the stimulus bill. What is included is a directive to give money to states and cities, for them to use on shovel-ready projects. What you have there is just a list of shovel-ready projects, but not all of them will be funded by the stimulus. It’s a wish list. You puit more stuff in your wish list than you know you’ll receive, just like a kid at Christmas.

While there is “pork” in the bill, this list isn’t it. Some of the true pork was trimmed last night when Democrats and Republicans worked together to reduce the size of the bill.

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avatar kufan

I understand why you feel this way but there has to be limits. If they go back retro to the past credit then people who bought in 2007 will want some credit and so on and so on. The world as we know it has changed and I see anything that the government can do to help this downhill slide as positive. I am guessing those that purchased in 2008 will at least not have to repay their 7,500.00 which is WAY more then we got with our home 7 yrs ago.

For those that think the stimulas idea is crap I would say it is all a matter of perspective. If you have a job you never expect to lose with a downpayment saved and/or a large bank account this may mean nothing to you. But an average working couple making 60,000 -100,000.00 who have managed to saved 20% for a downpayment (real money and NOT the “no money down” deals of the past) may be very hesitant to risk 30K due to the economy. This stimulas may encourage them to do so. My son and daughter-in-law are a case in point. We have encouaged them over and over again to stay in their nice apartment until things are a little better including their job security. Now with this stimulus we are all rethinking this.

It is not just a matter of do you have the downpayment and can you make the payments, it is do you have the confidence in continued employment to make the leap into home ownership and risk your hard earned savings. This stimulus I believe will make quite a few consider taking what amounts to a leap of faith. If it doesn’t give people who truly want to be homeowners, but are hesitant due to the economy the needed insentive nothing much else will short of winning the lottery.

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avatar snaps2721

The mayor’s wish list is just that, I agree. I realize that any monies being requested and approved will be funneled through the states and cities. If you go through line by line, some of the pork projects we’ve been getting sound bytes on are in there. I just wanted to demonstrate how unbelievable and incredible some of the items on the list are.

It’s just amazing the Christmas tree list and that someone actually put some bizzare stuff in the bill.

So much of this stuff should be handled through donations, taxes and/or bond issues. It’s just that we’ve become so dependent on the Fed. They take the tax money that should be left to us to invest in our local communities and states. If they just lay off, more money would stay local and that money would be availble for us to spend on our local projects.

One thing I notice is improvements for Interstates. The Fed should ask what sections need improvement or repair, ask the state for local bids from which the best bid should be submitted and the request for the funds then. Those items should not be part of wish list. the Fed made then.

Am I crazy? I’d sure like to see some progress and sure wish Mr. President would stop yelling at us. We are doing what we as Americans should be doing. I’ve written and talked to their offices. Those who wish to contact the legistors: http://www.senate.gov and http://www.house.gov.

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avatar elroque

So why aren’t those who bought homes from January through March 2008 qualifying for any of this crap? I mean the housing market sucked the same back then! Why are they getting left out?

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avatar snaps2721

As for not getting the credit that is now being considered, well … let’s see

The day before I turned 18, the drinking age changed to 19 and the very next year it changed to 21!—couldn’t change my age.

Two months or so after I bought my second car, the same car’s price dropped 2,000 and the rate down a percent. I bought a chrysler last summer just before they had the “gas card program” so I lost out on that.

People who bought hybrid cars which became two years old before the tax credit was instituted did not get the first year’s tax credit.

I’m young enough now that my full SSS benefits will not start until I’m 72! Sure I can retire early and take a lesse amount but in order to get it in full upon retirement, I can’t retire until I’m 72.

Laws change all the time. Sometimes it may not seem fair If we miss the benefits, it sucks, but we can’t retro-activate everything to everyone’s benefit. In this case we’d have people trying to get this retro’ed to the 50′s or more.

Sucks, sure. Just life.

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avatar prplbm2k

Hey thomas, I know you said your getting the credit. How do you get it? I am in escrow at the moment and plan on closing in mid March. How do I apply to get the credit since I am within the time frame? Please let me know. Thanks

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avatar prplbm2k

Can anyone post how you get this such credit? I am in escrow at the moment and will be closing next month.

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avatar Pip

I’m not sure what is so hard for people to understand here. It’s black and white. Congress passed a Tax Credit in 2008 starting on the ridiculous date of April 9, 2008, with the condition that it be payed back. In 2009, they decided to remove the repayment… but only for 2009… effectively giving the middle finger to any that used it in 2008. Instead of modifying the law for it’s entire time frame, they modified half of it. They know what they’re doing to people, and they don’t care. It has been a mess from the start and it’s only getting worse. People should be upset, and they should let their representatives know about it.

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avatar Joe Blow

You nuts for thinking house prices should come down…houses have typically always increased in value…sellers should and i think will hold firm…you can keep renting…which is throwing our money out the window…or living with mom and dad…

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avatar Seth

Agree with you Pip. They’re screwing over half the people that took the incentive last year and actually DID help the economy.

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avatar Wondering

I closed 2/29/08 – Do I get anything???

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avatar BigDogsRule

Pip, I contacted my congressman regarding the repayment of the 2008 FT homebuyers credit, which I qualify for. No response. Typical……….

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avatar Luke Landes ♦127,550 (Platinum)

Wondering: Based on that date, you don’t qualify for either the $7,500 credit (loan) or the $8,000 credit.

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avatar Becca

I bought my home last year. I recently got married and my husband will buy our second house, with me as the secondary person on the loan. He will be a first time home buyer .Will he still be able to get the credit?

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