Friday, February 13, 2009

Homebuyer Credit Won’t Stabilize Market, Analysts Say

Nick Timiraos wrote this nice short article on the Wall Street Journal pages. But, it was the comments by his readers that caught my attention.
The $15,000 homebuyer tax credit didn’t survive the final negotiations on the stimulus bill. Instead, Congress slightly increased to $8,000 an existing $7,500 credit for first-time homebuyers and eliminated repayment provisions.Congressional negotiators said that $8,000 number isn’t yet finalized.
The move was sure to disappoint those who had favored a more generous $15,000 credit for all home buyers in the Senate bill.

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Homebuyer Credit Won’t Stabilize Market, Analysts Say

Here are the Comments to the Article. As you will notice, very passionate.
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Nick … is there an income limit to the new $8000 credit? Is it still the “must make under $150K as a couple” limit?
Comment by MC - February 12, 2009 at 12:26 pm
I hate every distortion of the market. Let housing find its bottom. As soon as it does, boom, so many young people will flock into the market that prices will go up. Every foreclosed home is a young buyer’s opportunity. Why don’t the media ever ever report this?
Comment by Park Slope Pubby - February 12, 2009 at 12:29 pm
I was pre-approved for a home loan this week a move that I made based on the news of the 15000 dollar credit. The news now of that being canceled has put me back on the sidelines. Nice move Palosi! I wish your wetland mouse the best
Comment by P.Tiffany - February 12, 2009 at 12:36 pm
Thats not fair that those in ‘09 don’t have to pay it back and those in ‘08 do. Are we sure that this is the case?
Comment by Neil - February 12, 2009 at 12:40 pm
It’s supposed to be an incentive for people to buy houses, not a transfer payment. Life isn’t fair; get a helmet.
Comment by Sorry Neil - February 12, 2009 at 12:43 pm
I’ve read in several news reports that there are income limits. I think it’s safe to assume they are the same ones as in the 2008 credit/loan: 75k individual, 150k couple.
Comment by Ed Poon - February 12, 2009 at 12:44 pm
I don’t think that the 15,000 tax credit would have helped as much as everyone thinks it would have. It was a non-refundable credit that would be spread over 2 years. In order to get the entire 15000 you would have to owe that amount in taxes that year. So many of us would not have benefited from it.
Comment by Tyerll - February 12, 2009 at 12:45 pm
The poor decision by the government is actually going to work in my favor. First time home buyers that are going to be buying a home anyways will get to take advantage of an even more frustrated and struggling housing market. Home builders and sellers will again have no choice to increase incentives and decrease prices. Thanks Federal Government!!
Comment by Mike - February 12, 2009 at 12:47 pm
For first time buyers who used the credit in 2008 still have to pay it back over a 15-year period. This should be elimindated and not make us pay it back.
Comment by Mark - February 12, 2009 at 12:48 pm
Yes, we plan on buying a house to take advantage of the tax credit, as soon as the President signs the bill. We were going to buy a house any way, but this sweetens the deal.
Comment by AJ - February 12, 2009 at 12:50 pm
My fiancé and I were just talking about talking to our credit union to get approved for a loan. $15K was too much to turn down.
Now we’ll just wait until we have the full 20% down payment, which will be 1.5 years from now.
Comment by Red - February 12, 2009 at 12:52 pm
It will only be fair if the government would raze all existing housing and build uniform apartment buildings and let everyone live rent free. There would be 10’s of millions of jobs created both in demolition and construction. Housing should be a right, and not a luxury of those who are willing to slave away at some thankless 9 to 5.
Comment by The Great Helmsman - February 12, 2009 at 12:55 pm
Same here AJ. My fiancee and I are buying and had already resigned ourselves to the fact that we would pay back the $7500 tax credit. Sweet deal for us, sorry to those that bought in ‘08.
Comment by Paul - February 12, 2009 at 12:58 pm
Treat everyone the same. Homebuyers in 2008 should not have to pay back the $7500 tax credit.
Comment by Paul - February 12, 2009 at 1:00 pm
Mark, you got an interest free 15 year loan. What are you complaining about, and what do you say to people who bought in 2007 and got nothing? Should uncle sam just write $8000 checks to everyone who ever bought a house?
Comment by Uh - February 12, 2009 at 1:03 pm
Yeah, let them keep the 7,500. And while we are at it, we should send a check to every propertied person who has ever made a purchase which depreciated.
Comment by The Great Helmsman - February 12, 2009 at 1:06 pm
If I buy a house after this goes through, but before April 15th, will I be able to claim the $8000 on my 2008 taxes?
Comment by Grateful Red - February 12, 2009 at 1:07 pm
This is completely unfair.. ‘08 pays it back, ‘09 doesn’t… is this a joke? … I don’t get it.
Comment by C. - February 12, 2009 at 1:08 pm
yes, it might change our plans. we have been waiting to buy a house the last few years. we have excellent credit. just couldn’t bring ourselves to pay such high home prices. now we are waiting for a correction in home prices.
Comment by TR - February 12, 2009 at 1:15 pm
The tax credit would put people in houses and money back into the economy. People need new appliances, carpeting, paint, etc. for their new houses. It will not only stimulate the housing market, but it will stimulate the economy in more ways that one.
Comment by Tim C. - February 12, 2009 at 1:17 pm
Life is not fair, but look at it from the governments perspective…those who bought in 08 were probably happy with the deal at the time, why spend more money to make something retroactive and lose $7500 for all those first time buyers who took advantage of it. I was one of those people, and I would love a free $7500, but how about those people that bought houses in january-march of 08 and did not get the tax credit at all…I bet they are even more upset…trying to stay happy that atleast I got a 15 year interest free loan of $7500
Comment by so is life - February 12, 2009 at 1:18 pm
If you don’t like it call your senator.
Comment by Common Sense - February 12, 2009 at 1:20 pm
I purchased my home on 12/22/08…exactly ten days before being eligible for the credit. I think I am going to vomit.
Comment by Willis - February 12, 2009 at 1:21 pm
Does anyone have any information on whether or not the $8k version is refundable, or is it based on your tax liability, same as the Senate’s original $15k version was? **Do you have to pay in $8k to qualify for $8k, or should you expect $8k in addition to any refund you would otherwise receive?
Comment by JB - February 12, 2009 at 1:22 pm
The 8K replaced the original 7500 and they eliminated repayment provisions. You should recieve the 8k in addition to the refund you are already expecting… unless you owe taxes.
Comment by Kristen - February 12, 2009 at 1:37 pm
As a Realtor, I can tell you when there was a talk of a $15,000 tax credit, my phone was ringing like crazy with people suddenly motivated to buy or sell.
The $8,000? Total silence.
Comment by Duplex Chick - February 12, 2009 at 1:39 pm
The home buyer credit would have helped me to sell my house so I could build a new house. Instead I get a $400 tax credit. Unbelievable. The new home I want to build would provide construction jobs, sell furniture and appoliances, etc. etc. etc. Even a $5,000 or $7,500 credit would have sparked buying and selling. They should have put sometning in and I think they are idiots because they missed a golden opportunity.
Comment by Greg - February 12, 2009 at 1:41 pm
Quit complaining about having to pay it back. Tax laws change all the time. Lots of people have gotten no special deals in buying a home. Those people who have to pay it back are still lucky to get an interest free loan from the government that they have to make a small payment on each year for 15 years. I’ll bet everyone out there with debt would love that type of a situation. This type of greedy thinking is what has gotten us into this mess in the first place. No one owes you a dime. Your friends, co-workers, and relatives are paying for that “government” free money you are getting.
Comment by Stop Whining - February 12, 2009 at 1:42 pm
the 15k was a refundable credit people. most taxpayers wouldn’t qualify for 15k. we make about 90k/year and have 3 children, our tax per year is about 4000… we would get 4000. that’s not really enough to make me go out and buy a home. we have been wanting to buy a house for the last year and if the 8k is non-refundable we will probably see what we can do before Aug of this year.
Comment by heidi - February 12, 2009 at 1:43 pm
Everyone on here that is complaining about the old credit, new credit, not getting the credit.. stop! What about us renters out here that have been saving money to buy a house. We knew those loans were bad, knew that we didn’t want an ARM we wouldn’t be able to afford, and yet our rent keeps going up because people are loosing their homes. We aren’t getting a bailout, and we were probably the smart ones.
Comment by Renter for the last 5yrs - February 12, 2009 at 1:46 pm
Those of you that think you were unfairly treated if you took the repayable $7,500 are all wrong. The goal is to stimulate going forward, not reward past behavior- you were already stimulated. For example, if capital gains rates drop in 09 that is like complaining that you paid a higher rate in 08 and you deserve the lower rate. This argument hold no water whatsoever. Just sour grapes.
Comment by juice - February 12, 2009 at 1:47 pm
Nice work Senate, take out the only part that would really kicked housing in the pants and get it moving. There is a big add-on effect when people buy homes (mortgages, realtors, home improvements)
Comment by Mike C. - February 12, 2009 at 1:48 pm
The 15k was non-refundable and the 8k is refundable.
Grateful Red,
Yes, you can take the 8k credit on your 08 return, even if you purchased the house in 09. You just have to make the election to do so. If you are going to buy after April 15th, just extend your return and you can file in the summer/fall after you purchase your home.
Comment by tcreach - CPA - February 12, 2009 at 1:49 pm
So in order to qualify for the money you need to still owe it, if after all your deductions and credits you only pay $2k then the max you can get back is $2k, it’s not welfare unlike some of the provisions
To the “life is unfair” whiners, suck it up crybabies, that’s how life works, in fact that is what makes it so great! Equality for all would be a living hell.
Comment by Yes you have to have paid $8k to get $8k - February 12, 2009 at 1:52 pm
Not sure what is best for the economy in the long run, but I do know this- If they passed the $15k housing credit I would’ve bought a house this year. Now that it’s $8,000 and you have to buy by the end of August, not even giving the whole year, I will not be buying. Just that simple.
Comment by Jay - February 12, 2009 at 1:53 pm
8k “through August” meaning August 1st or 31st?
Comment by Susan - February 12, 2009 at 1:53 pm
I closed on a house on December 19th. I’ve been following this with great interest, of course. I’m not bitter about having to pay back my 7500. However, if I had 8 or 15k that I did not have to pay back, you’d better belive I’d be stimulating the economy with it, regardless that my home purchase happened in the past. As it stands I’ll use 7500 to clean up a nagging credit card debt and put that monthly payment toward remodels and such, but 15k (or whatever I would have gotten based on my income, probably a little less)would have meant starting at least one major project in the next year. Being a DIY’er, I would have doubled the value of that 15k with my own labor, creating real value for myself and the economy going forward for many years. With 7500 I have to start paying back in two years, nothing changes, and that’s ok too.
Comment by Matt - February 12, 2009 at 1:55 pm
I am a Realtor and the calls had been lighting up the phones with clients wanting to buy with the $15,000 tax credit. I read here some people “think” it would not help. Believe me, it was working and had a crowd of people ready to jump in the market and off the sidelines.
If we want to say no to an taxpayer incentive to buy housing, then taxpayer’s money in their house equity continues to go down the drain. You’ll pay either way.
Comment by Steve - Realtor in Illinois - February 12, 2009 at 1:56 pm
You don’t have to to have 8k in tax liability to claim the 8k credit - it is a refundable credit just like the earned income credit. You could potentially have 0 tax liability and get 8k back…essentially paying negative tax (socialism).
Comment by tcreach - CPA - February 12, 2009 at 2:00 pm
Why August?
Comment by MortgageGuy - February 12, 2009 at 2:01 pm
Yes!! For people who don’t have a high income to pay 15,000 in tax in two years the 8,000 sounds great!! I like the idea of this low-income people for getting the benefit instead of high income people trying to take advantage. For those who bought in 2008 sorry… think about those who didn’t receive anything before 2008… is it fair that you got a free interest loan?.
Comment by Fco - February 12, 2009 at 2:02 pm
If I purchase after April 15th and before August, then can’t I still ammend my 2008 taxes to get the money in 8 weeks(like the $7500 credit) rather than paying a tax return extension fee?
Comment by Mark - February 12, 2009 at 2:07 pm
I don’t think the refundability issue with the $8k credit has been decided or at least released yet.
Comment by MTF - February 12, 2009 at 2:09 pm
Tax return extension fee? There is no such thing. It’s free to extend your return. If you don’t file for an extension or file your return then there is a late filing penalty but as long as you file and extension, your covered. Now, if you are going to extend and still owe tax when you do finally file, you’re required to pay what you will owe when you file your extension. With a 8k credit, though, I doubt that will be a factor. If you have more than 8k in tax liability then your income is probably too high to get the credit anyway.
Comment by tcreach - CPA - February 12, 2009 at 2:11 pm
My wife and I have been planning on buying this year. We will be doing so with or without any tax credits. It’ll be our first home. While the extra $$$ in the form of credits is always nice, it won’t change anything for us and I don’t think it’ll change anything for anyone else either. The lending standards changed. You need to have (in most cases) 3%+ in down payment and show that you can make your house payments. This won’t change that. The $$$ won’t be in people’s pockets until after they’ve bought the home (it’s a tax credit remember); all it will do is allow some people who get it to spend it about a year after they buy the home, which is when they’d prob get the money. But I bet that not all who receive it will spend it, especially in these times of paranoia.
About $285 billion of the stimulus package is in the forms of tax cuts. That’s a huge sum of money that won’t stimulate the economy, it’ll only further bankrupt our gov’t and allow foreign nations to buy up our debt.
Comment by First Time Buyer - February 12, 2009 at 2:25 pm
An $8K refundable credit is actually better for me than a $15K non-refundable spread over two years.
Our family income is around $70K, income tax is $3800/year, so the $15K credit was worth around $7,600.
As for the poor saps that got a $7,500 loan at 0%, compare yourselves to those that bought in 2007 instead of 2009. You’ll feel much better.
Comment by SF - February 12, 2009 at 2:32 pm
Wow…the greed of the american people amazes me. They don’t even have to give a credit. Bush’s credit had to be repaid….not now….figure it out….its like making money if you figure out what the payback was over 15 years @approx. $502 a year. My calculator figures that out at $7,530 in money you save to repay it. This absolutey amazes me. If you can’t buy a house without the $15,000 you probably shouldn’t.
Comment by Joanne - February 12, 2009 at 2:33 pm
You save $7530.00 if you don’t have to pay back the money as in the past. Its a no brainer.
Comment by JChomebuyer - February 12, 2009 at 2:37 pm
Comment by JOhn - February 12, 2009 at 2:43 pm
Yeah I am glad that they limited it to first time homebuyers. Those of us who lost our shirt in equity don’t need help like those first time homebuyers do we?
Comment by John - February 12, 2009 at 2:44 pm
I love these smug weasel realtors “You’ll pay any way”. No I won’t. When I present a purchase contract it will be done by my lawyer, to the selling party, with a “no-comission” provision. Ha!
Comment by Alternate Reality - February 12, 2009 at 2:44 pm
“Our family income is around $70K, income tax is $3800/year”
I was unaware of the 5.4% tax bracket.
According to this (, even if you adjust your taxable gross income for a married couple down to $50K from $70K, you are paying over $6600 per year in taxes.
To pay what you say you are paying, you would have to adjust your income from $70K down to $30K with deductions. If you have figured out how to do that, please share.
Comment by Andy - February 12, 2009 at 2:45 pm
Yes, those of us who bought a house in ‘08 are upset. There was plenty of talk about not paying this back and possibly getting more money. Lots of us could use more cash right now and not paying that money back would help even more. If I had a choice between the interest free $7500 or nothing, I would still take the interest free $7500 loan, so I am not that unhappy. It still sucks we just missed out on not paying it back.
Comment by Ohio Buyer - February 12, 2009 at 2:47 pm
The child tax credit is $1000 per kiddo, so if they have kids, that may explain the discrepancy
Comment by MTF - February 12, 2009 at 2:58 pm
it does suck for people that just “missed out” especially if it was by a few days. It could be could be the guy who entered the office mega millions drawing every week but called off sick one day and their numbers hit.
the bill hasn’t passed yet so don’t jump to conclusions.
Comment by Adam - February 12, 2009 at 3:00 pm
Business People who don’t think there is enough $$ in the bill should tell their Republican friends to stop cutting out the funding instead of complaining that it isn’t going to work because it’s not BIG enough. Tell it to McConell, Shelby, Alexander and the reat of the conservative bunch. Don’t whine about it here!
Comment by Kate Cooper - February 12, 2009 at 3:07 pm
sorry I meant the 15k was non refundable… meaning you don’t get more than you pay in.
to andy… Their income and taxes sound right, on mine and my husbands, we have 3 kids and student loan interest deduction. We had an income last year of 79k an AIG of 77k, our tax was 6559 and then minus 3000 for the child tax credit and you get 3559. The money chimps calculator doesn’t come out right on mine either… saying we would of paid in closer to what was actually withheld out checks. I have done my taxes every year on Tax Act…. they are usually about the same.
Comment by heidi - February 12, 2009 at 3:09 pm
People PLEASE! For once and for all… The purpose of any home tax credit should be to stimulate the economy going forward and NOT I repoeat NOT to reward those that already bought a home. It makes no sense to spend money on rewarding people that already purchased a home. That is a waste of our tax money! Second, why only first time buyers? Are they trying to stimulate the economy or reward the influential “first time buyer” demographic? Makes no sense. The Democrats have a good reason not to reward the Republican lobbyist by removing their 15K Senate amendment BUT why waste our money by rewarding past behavior that does not stimulate our economy?
Comment by WhatThe - February 12, 2009 at 3:12 pm
Andy, my family is in the same category. 2 kids plus deductions for charity, student loan interest, etc. My “effective tax rate” was 5.48%
Comment by Kris - February 12, 2009 at 3:13 pm
Yeah! I’m a 1st time home-buyer but we have our eyes set on a foreclosed-upon HUD home. The $15k tax credit didn’t excite us (it was $15k OR 10% of the purchase price–whichever is lowest) since we’d have an extremely low purchase price (and large home repair loan). We actually get a better deal with the new $7500 credit.
Thanks, Uncle Sam!
Comment by Anonymous - February 12, 2009 at 3:15 pm
Yeah! I’m a 1st time home-buyer but we have our eyes set on a foreclosed-upon HUD home. The $15k tax credit didn’t excite us (it was $15k OR 10% of the purchase price–whichever is lowest) since we’d have an extremely low purchase price (and large home repair loan). We actually get a better deal with the new $7500 credit.
Thanks, Uncle Sam!
Comment by I'm Lovin' It - February 12, 2009 at 3:16 pm
“Andy, my family is in the same category. 2 kids plus deductions for charity, student loan interest, etc. My “effective tax rate” was 5.48%”
I see - I stand corrected. I failed to consider the child tax credit.
Comment by Andy - February 12, 2009 at 3:19 pm
For an industry that at one time represented 20+% of the nations GDP we feel like we have just had a dagger stuck in our back. We are happy for the ” first time buyers” but the custom builders of this country have been given nothing. As an industry we didn’t go to Washington asking for money for ourselves , our goal was to stimulate our industry . This tax credit would have been a real shot in the arm for us and now we have to hope that the Banks will do something . I can’t begin to tell you how we currently feel about the banking industry!
By the way our own orginization NAHB has really dropped the ball for us small guys. We hope the track builders can sustain your orginization because we will probably opt out.
Comment by Chuck The Builder - February 12, 2009 at 3:19 pm
I can’t stand the whiners that signed the papers and closed on a house knowing full well that it was a $7500 “interest free loan” to be paid back over 15 years.
You took advantage of what was offered at the time. Complaining now is only whining.
It is no different than someone putting money into a slot machine complaining the next person on the machine got the pull that won the money.
Comment by Bill Jenkins - February 12, 2009 at 3:27 pm
We will owe about $1,000 for taxes so if I file an extension then I pay it at that time and redo my taxes in July when I buy a house and get the $8000, Is that correct?
Comment by Mark - February 12, 2009 at 3:30 pm
8k “through August” meaning August 1st or 31st?
Comment by Susan - February 12, 2009 at 1:53 pm
Ditto, i was wondering the same thing. I’m signing a contract tommorrow to have a home built with closing date of 8/21/09?
Comment by jacob - February 12, 2009 at 3:33 pm
And it also is amazing to see the amount of people who do not understand what a tax credit is in the first place.
Learn the difference between tax deductions and tax credit before you uninfomed clowns shoot your mouths off.
Comment by Bill Jenkins - February 12, 2009 at 3:35 pm
I really don’t care about 07′ 06′ or whatever. When did the housing market really crumble? My home was worth so much more when I bought in Aug 08′ to what’s it worth now. My fault housing market stinks? or lack of responsibility on banks - no. I saved up 10% for a down payment, then got a loan. I’m now going to take the 7500K interest free loan (okay); but this new law may change this to 8000K and require no pay back. This no payback should be applied to last year also due to the slump in housing.
I wonder if the wigs on capital hill are taking this into account - do 2008 need to pay back their “credit 7500″, if you change it might as well change it for last year and back it up with the housing market data.
Comment by Mark (second post) - February 12, 2009 at 3:35 pm
Bring on the incentives!! My fiance and I were planning on buying in 09 anyways. This just makes it even sweeter. The home builders are being brought to their knees with all of the falling home prices and jump in foreclosures. Now, all the predatory, snobby, and unprofessional home builders will be at the mercy of the first time home buyer. I can’t wait to walk in to our new home builder’s office with a check book and watch them praise me like the second coming. I’ll name my price and all the options I want for free and make out like a bandit. Thanks Obama and Geithner!
Comment by MR B - February 12, 2009 at 3:36 pm
“It is no different than someone putting money into a slot machine complaining the next person on the machine got the pull that won the money.”
—- really? no different? at least at the casino’s you know what your getting year to year that slot machine will pay this out if you hit this. Rules dont change there.
Comment by BJ slot machine - February 12, 2009 at 3:39 pm
MR B, don’t thank Obama and Geithner. Thank congress…particularly the republicans who actually were responsible to bump it up to $15000 only to be shot down by Reid & Pelosi while they cut the bill’s cost down. (Notice, their pork will remain going to green golf carts and other garbage).
With a $15,000 tax credit I could buy a house, install a $20,000 solar panel system on the roof and then get another check for $4500 for the 30% renewable energy credit.
Then I’d have to wait 10-15 years to recover my costs. But I like not having to pay the electric company though. That’s just me.
Comment by Bill Jenkins - February 12, 2009 at 3:40 pm
Sorry Andy… Two kids, as mentioned by another poster, plus we got the income down to the mid-$40,000s.
The point was that there’s a huge group of middle class folks that are unaffected by the conference committee’s action.
Also, to those that bought in 2008 and have to pay this back, the net present value of a 15 year, $7500 loan at 0% is a few thousand dollars.
Comment by SF - February 12, 2009 at 3:41 pm
“It is no different than someone putting money into a slot machine complaining the next person on the machine got the pull that won the money.”
—- really? no different? at least at the casino’s you know what your getting year to year that slot machine will pay this out if you hit this. Rules dont change there.
The rules didn’t change. Last year there was one rule, and this year there is another. People before you got nothing. Whine whine whine.
This will end also…what about the people after?
The rules are in place and you are ignoring them because it doesn’t help you.
Comment by Bill Jenkins - February 12, 2009 at 3:42 pm
The idea that people are NOT waiting on the sidelines, and would buy one way or another anyway, is simply not right for certain parts of the country. For example, scores of 20 and 30 somethings in the Bay Area got priced out during the boom. They have great jobs and large, steady incomes, and they’re all sharing rented homes and apartments. They are dying to sink into the suddenly affordable real estate market but not stupid enough to do so when prices are free falling. It’s hard to imagine that the same doesn’t hold true for other metropolitan areas that got run up during the boom. At this point you need incentive to take on the extreme risk of a home purchase.
Comment by Jason - Palo Alto - February 12, 2009 at 3:47 pm
“Washington needs to do more at compensating home buyers for the now considerable danger of yet lower home prices”. ??? As a buyer, I find ‘yet lower home prices’ welcome, not dangerous. Bubbles…I find bubbles dangerous. Lax lending…also dangerous. A nation of greedy, me-first, presumpuous whiners…alarming.
Comment by Tucson Collapse - February 12, 2009 at 3:52 pm
I’m disappointed about losing the $15K, but $8K is nothing to sneeze at. We are going to close on a house (a fixer-upper) in the middle of March and hope that the $8K happens. If not, we’ll be happy with the $7500 loan.
Comment by MG - February 12, 2009 at 3:55 pm
Dear Bill Jenkins,
Let people vent… no one wants to hear you wag your finger.
Comment by Anthony - February 12, 2009 at 3:56 pm
The slot machine analogy works for me. The who did what, when and whats going to happen 10 years from now is not living in reality. It is what it is!!! The stimulus package??? can’t be soley focused on homebuyers. Education is in there….and God only knows that needs a boost. There are so many things more important than the $8,000 to me. I’d give it back if they could promise an end to terrorism and fear. We need to WAKE UP AMERICA
Comment by JChomebuyer - February 12, 2009 at 3:58 pm
People need to have a finger wagged in their face..vent with your spouse or significant other. They want to hear it as much as I do!
Comment by Joanne - February 12, 2009 at 4:00 pm
“Washington needs to do more at compensating home buyers for the now considerable danger of yet lower home prices,”
Danger??? DANGER?????? WHAT ABOUT ME, the potentional HOMEBUYER??? I dont want to pay your f**king higher prices just so you can take out another mortgage. This is pissing me off!!! LET PRICES FALL YOU IDIOTS!! We as a nation are SOOOOOO selfish…
Comment by Stpn2me - February 12, 2009 at 4:02 pm
Jacob - I read somewhere through August 31st - so you are covered.
Now I need to see if I can get the builder to hurry up with ours
Comment by Susan - February 12, 2009 at 4:07 pm
Damn! This was the only thing in the stimulus package that made sense. This would definately get people off their butts and get in the housing market. I am buying a home any ways but an additional $8K or $15K I would take and make repairs to an abandoned/foreclosed home. OK…I would probably save a bit for rainy would have to be an idiot not to. Putting most of this money back into the market makes sense. I have no ties to the housing market other than being a buyer/seller…I’m not a morgtgage broker or realtor. They need to open this up to all buyers! This would help with the falling housing prices and this would benefit everyone! Even the people that bought before the deadline. This would increase home values across the board.
Comment by Rich - February 12, 2009 at 4:07 pm
Just what is so go damn hard about offering a FULL 15K credit, which will not be split in two years, but one, does not have to be payed back, and does not depend on tax liability?!? THIS IS REAL STIMULUS! The bill is packed with pork anyway and they manage to throw out the real stimulus.
Comment by NNP 43S - February 12, 2009 at 4:08 pm
Stpn2me….its going to be O.K. You can’ let all the greedy, selfish b*****ds of the world get you pissed off. Life is actually good….let the whiners suffer with high blood pressure etc. We can’t allow them to bust our buzz!! When we die…and we all will…none of this will matter anyway.
Comment by JChomebyer - February 12, 2009 at 4:08 pm
Stpn2me -
You are seeing this only from your point of view. Those people who already own homes have no desire to see their prices drop further. The economy was flourishing when the housing market was flourishing. The two go hand in hand. While it may not help you personally for prices to stabilize, it does help the economy as a whole - and that is really what the stimulus was supposed to be about, no?
Comment by Andy - February 12, 2009 at 4:10 pm
First time home buyers only? Come on these are the only people buying houses! Why the hell would you want to give the incentive to them only?
Comment by Anonymous - February 12, 2009 at 4:11 pm
Anonymous, because it is enough…. investors ruined the market already…. let us the FTHB to get the house as well:) Blessings!
Comment by me - February 12, 2009 at 4:13 pm
Yes, this was to stimulate the economy going forward not backward.But then what is the justification for giving the credit from Jan 09 and not from the day it is signed? why not then from Dec 08?
Comment by sm - February 12, 2009 at 4:15 pm
Can someone please explain to me why everyone keeps saying they wouldn’t have qualified for the $15,000 credit anyway? You could have split it between 2 years, meaning you only had to have income tax liablity (not how much you owe at tax time after withholding) of $7,500 in a year. Someone wrote that they made $95,000 but paid $4000 in taxes per year so could only have benefited up to $4000. How is that possible (and can I please get the name of your tax accountant?!).
Comment by Please explain - February 12, 2009 at 4:17 pm
To “Park Slope Pubby:” Unfortunately, Pubby, young buyers have shown no interest whatsoever in buying beat-up neglected homes. You and our lawmakers are thinking it is 1972 and home buyers want to buy homes they can fix up and build sweat equity in. Believe me, I know, I was one of those in 1972. Today’s home buyers have neither the time, talent or desire to tear a house apart and put it back together. The people who are buying up the foreclosures are professional investors, primarily.
First-time home buyers and “young people who want to buy forelcosures” makes up a VERY small percentage of the real estate buyers required to right this capsized real estate ship.
The $8,000 tax credit to first-time home buyers is like putting a band-aid on gushing artery. It is terribly short-sighted and small-minded thinking.
All of our lawmakers are talking in generalities but nobody is talking REAL numbers. Here are a few. Recently, I showed homes to your “young people” buying their first home, Mr. Pubby. Her credit was destroyed, his was okay but not great. Thye had to borrow $1,000 from their parents for a down payment. There were 49 homes in their price range, 41 of the were foreclosures or short sales, ALL 49 were in disrepair. Many had no heat (turned off and the pipes allowed to freeze), no lights, and not ability to turn the utilities on to do inspections.
The buyer is required to buy a “pig-in-a-poke” with no ability to see if the mchanicals work before closing. Just how many “young people” buying their first home would be foolish enough to do that? That $8,000 tax credit would be used up just replacing the destroyed plumbing!!
What our lawmakers need to do is get out of their ivory towers and get into these homes they know nothing about. 70% or more of toady’s real estate sales in the Greater Grand Rapids area are foreclosures or short sales. If the “bottom” is any farther down, Pubby, the real estate market may never recover.
Comment by Don, Realtor in Grand Rapids - February 12, 2009 at 4:19 pm
Well, I can see the big picture is lost. Greed is why people bought when they did and Greed will piss them off now. Some thought the balloon would get bigger and bigger and never pop! Well, POP!
Comment by JCHomebuyer - February 12, 2009 at 4:20 pm
Amen, Don!!
Comment by JC - February 12, 2009 at 4:22 pm
Timing is everything in life…We bought a home and the seller took 25K of the asking price and put a brand new roof($8000) on the house, a good rate of %5.2 AND I get 8K free and clear..from our wonderful government(sarcastic on the government..HAHHA)..WOW…Again,timing is everything…
Comment by Steve - February 12, 2009 at 4:23 pm
“Why the hell would you want to give the incentive to them (first time homebuyers) only?”
Selfishly, I would like to see it for everyone, but I understand why it is not. If a non-first time homebuyer buys a new home, it puts another home back on the market for sale. It does nothing to eliminate the inventory that is out there. The 1st time homebuyers are critical right now. We need them to get rid of the inventory. FWIW, if you have not owned a home for 3 years (maybe 2?) you still qualify as a first time homebuyer in this bill. The reason for that is because if that is the case, you are still helping to reduce the inventory. Prices cannot stabilize until the inventory goes away.
People must remember that this is for the ECONOMY, not the individual.
Comment by Andy - February 12, 2009 at 4:25 pm
I just purchased a home on January 30, 2009 and was happy to simply received the no interest loan.
Since then hearing about the 15,000 credit only being offered to folks was well a real downer.
Amazing how the fates change. Now it appears the 15000 will not happen and buying anytime in 2009 means you don`t have to pay the 7500 back.
What a roller coaster ride.
Comment by Late49er - February 12, 2009 at 4:29 pm
I don’t blame the schlubs who bought in 2008 for complaining about the credit not retroactively applying to them. Congress is sending mixed messages when they are passing anything with retroactive effect — the fact that it is even retroactive to January 2009 makes its incentivizing goal a farce. It’s income transfer, guised as incentive. The year-end cut-off is arbitrary and ridiculous.
If they wanted to do some real incentivizing, they would not limit it to first time homebuyers and would make it effective upon passing; not retroactive at all. That woud be the most “fair” and logical thing to do.
Comment by Eva - February 12, 2009 at 4:30 pm
Jacob, Include a provision in your contract that builder guarantees delivery/closing by 8/31/09 or price is $8000 less.
Comment by Petra - February 12, 2009 at 4:33 pm
Mark…..”I really don’t care about 07′ 06′ or whatever”…. we don’t care about 2008 either!! Let’s move on. Are you mad because someone at work makes more money than you do? is that fair?.
Comment by CK - February 12, 2009 at 4:37 pm
Anthony…. let Bill Jenkins say what is true!! If this is hurting you so much turn the TV off, don’t listen, forget about a the new (not changed) law.
Comment by FV - February 12, 2009 at 4:40 pm
This changes everything. With a $15,000 credit, jumping into the housing market became possible. What I hate is that the $7,5000 “credit,” my wife and I (both post-graduate professionals with almost $3,500 a month in student loan payments) make too much to qualify. It’s a ridiculous situation, we’ve got the income, but no way in hell we’re venturing into a market that’s as unstead as it is with our current obligations.
Comment by Seth - StL - February 12, 2009 at 4:41 pm
If my spouse is not a first time home buyer (house is in his sole name) but I am, and I buy the house in my sole name, and we file separately, can I take advantage of this? According to this website: I would not be considered a first time home buyer. But when you read the actual IRS wording/website, I’m not so sure it’s clear that I can’t take the credit. Help?
Comment by Q4U - February 12, 2009 at 4:42 pm
For all my fellow $7.5K 0% loan receipients, as they say, hindsight is 20/20. My initial feelings were anger, but now that I’ve had some time to digest the new proposal, I’m actually happy. I’m glad its better than what we got…what we got didn’t do what it was intended to do (i.e. stimulate the housing market).
Look at the bright side, I hope it really does work and by increasing the demand in turn it will raise our home values.
For all those that are “mad” that the $15K got reduced to $8K, I say: Really? Really?
These people would be just as angry if initial talk of a $25K credit were reduced to a $15K credit. Don’t be greedy. It’s a darn good incentive, and if you are on the fence you should seize the opportunity and head over to your realtors website and start searching for your home.
Greed got us into this and more greed will only drive us further down. And yes, it is “us” (you and I) that will turn this ship around by smart spending and hard work.
Don’t sit around and let the government dictate your actions and decisions to you. Stand up and fight for it, if you really want it.
Comment by J-Mac - February 12, 2009 at 5:00 pm
Lots of the details have yet to leak out of the “transparent” White House. But, here’s what we know. The $8000 credit is refundable which for most Americans is a better deal than the $15K Senate version. Before you say, how’s that? Remember under the Senate plan the max you could get was the amount of your tax liability. It would take a $150,000 income or more to generate a $15K tax bill. Under the final bill, you get $8K even if you only owe $3K or even $0.
It looks like the only way to claim the credit however is on your 2009 tax form which is more than a year away. So much for stimulus right now.
Most stuff circulating on the Web is just plain wrong. Wait for the final details before deciding to buy.
Comment by RPK - February 12, 2009 at 5:06 pm
I hate to tell all of you this; but when this country elects a president with a Socialist agenda, then fairness goes straight down the toilet for everyone who works for a living. This is just the beginning.
Comment by Brian - February 12, 2009 at 5:07 pm
And if you are still feeling down, let me tell you about my situation. I was supposed to close in November on our newly build home, but got jerked around by my bank (Chase…boo!!!) and it pushed my closing until the middle of December.
Not only did I miss the $8K “free and clear” deal by closing about 3 weeks to early, I also got charged $2500 by my builder for closing 30 days after the contractual close date. And I had to pay that at closing in cash. (That was painful).
Life’s too short to get down and out. I immediately picked up a second part time job to make the money back and I’m going to be in better shape than before!
Comment by J-Mac - February 12, 2009 at 5:08 pm
For all of you complaining about why this only applies to “first time homebuyers” it doesn’t - for some reason congress likes to re-define common terms that are easy to understand. They have essentailly defined “first time homebuyer” as not-so-recent homebuyer.
Secondly, in my opinion this law should technically only apply to true “first time homebuyers”. People “swapping” homes does not take homes off the market and increase our real estate values - all it does is give the banks, title companies, and mortgage brokers a bit of “stimulus” when they charge more fees.
Much of this crisis is a result of those folks’ greed, and I for one don’t care to see them profit when it will do nothing to lessen the burden on the middle class.
Comment by Wake up - February 12, 2009 at 5:16 pm
RPK you can claim it on your 08 tax returns.
Comment by Adam - February 12, 2009 at 5:16 pm
How could any thinking person change his/her plans to buy a home based on this “incentive” when they face the prospect of losing his/her job? How many of the new buyers will end up in the foreclosure line? If you can’t afford it before the government incentive, you can’t afford it after the incentive.
Comment by laughable - February 12, 2009 at 5:17 pm
To everyone out there complaining that they won’t be getting the $15,000, but only the $8,000…how would you like it if YOU were the one actually PAYING all these taxes so that everyone else could get the $8,000 - and in many circumstances actually get money REFUNDED to them that they DIDN’T even PAY in the first place because they don’t even owe taxes - and then not even be able to qualify for a single penny of this whole ridiculous mess. Really?! THAT is a reason to be outraged. Don’t worry though, I’ll get back to work so that everyone else can receive their checks…my bad.
Comment by Ineligible - February 12, 2009 at 5:36 pm
And to think that I was getting excited about the prospect that for ONCE I might be able to get back just a little bit of the tens of thousands in taxes I pay every year … thanks to everyone in the Senate for giving me at least a few days to think that might happen. Oops, sorry, there I am wasting more time on the internet- someone’s got to pay for this whole thing. Happy homebuying.
Comment by Ineligible - February 12, 2009 at 5:39 pm
To those who are saying they were going to buy a home with the $15k credit but now that’s it’s ‘only’ $8k they’re disgusted and not buying… honestly? really? seriously?
This money does not change ones ability to purchase a home… you only get the money after the fact and in some cases perhaps a year or more after the fact. If you can afford a home now you can afford a home now. If you can’t afford a home now then $8k a year from now doesn’t change that. Quit whining.
Comment by Dude - February 12, 2009 at 5:57 pm
I bought in June ‘08. I have not filed for anything in regards to this credit yet, and have not done my taxes due April ‘09 yet, as I am waiting on this. They are saying the $8k is replacing the $7500 that was previously in effect, and it gives specific dates (which may be Jan 1 09 or the date the bill is signed . . TBD). Does that mean that once this is signed ONLY first time home buyers that fall into the date range are eligible, or am I going to be eligible for a tax credit of $7500 or $8k????
Comment by First Time 08 - February 12, 2009 at 6:18 pm
I closed on Dec 31,2008 so do I have to pay it back. According to the article, Dec 31 is the cutoff, isn’t it?
Comment by craig stevens - February 12, 2009 at 6:47 pm
Just curious, how do you know the $8k credit is refundable?
Comment by MTF - February 12, 2009 at 7:09 pm
Do you have to owe $8000 in taxes to actually qualify for the full amount like the $15000 tax plan or will I get $8000 on top of my refund? I should be getting a $2000 refund without the tax credit. So does this mean I will get $10,000 with the credit? This is so confusing. Please help.
Comment by CAR - February 12, 2009 at 7:35 pm
this has been a big rollercoaster ride. I bought my house in feb 09 and it was a foreclosure and needed repairs (new roof). I was planning on using the 7,500 to cover such cost. I qualify for a first time home buyer credit. However, paying the money back over 15 years was a drag. I am curious if the 8k that is being considered now is a similiar credit to the refundable 7,500 loan? Up down nobody knows until this sucker gets signed in. At any rate I believe this will help the housing market as there are a surplus of homes on the market (forclosures in particular.
Comment by steveo - February 12, 2009 at 7:40 pm
People, Does everyone realize that not only they dropped it from 15K to 8K, but it is now only for 1st time buyers. That takes the majority of the “stimulus” from it and it won’t make a blip on the radar in this mess we call an economy.
Comment by Patriot - February 12, 2009 at 7:52 pm
To CAR no you are not, if it is refundable the MAX you get is $8K, if not refundable the MAX is your tax liability, read the prior posts…….!!!! It is all empty talk anyway.
Comment by premature... - February 12, 2009 at 7:55 pm
It has been a roller coaster of ups and downs, people waiting to see what the final outcome of this is. Would $15k make it more appeasing to a potential home buyer? Probably so. But even if it is only $8k or you took advantage and qualified for the 0% $7.5k, if you can afford to get into a home then the money you save or are “investing” over the long term is worth it. Housing prices now may still be declining but look at the long term: More than likely you are going to be in your home for the next 5-20 years and I can almost guarantee that you will have built up some equity and will not have just been paying someone elses mortgage by renting. If you can afford to buy a home now, then buy. If you cannot, then even the $15k will not give you the ability to afford your payments for years to come. Simply put - Buy when you can afford - Only!
Comment by Tim S - February 12, 2009 at 7:56 pm
You are exactly correct about the 15K credit. I thought I was going to have a heart attack when I figured out our liability for last year. We paid 25K in taxes, it would be great to get SOME OF MY OWN MONEY BACK FROM THE GOVERNMENT!
PEOPLE: Giving refundable credits such as the $7500 tax credit to people that pay no taxes SOCIALISM! Why should the government give you back any more than your total tax liability for the year?
I would say that 80% of the people commenting in here don’t know the difference between a deduction and a credit, much less a refundable vs non-refundable credit. I think that is the worst part; some of the comments I have seen in here are terrifying.
Comment by Good Call - February 12, 2009 at 8:10 pm
To Neil, Mark, Paul (and whoever else–I can’t read these blogs anymore).
If you want government help, stop paying your mortgage. You think the handout your asking for is any better. Welfare is welfare.
Comment by Anonymous - February 12, 2009 at 8:47 pm
It is a foregone conclusion with Democrats in control of both the Congress and the White House that they are going to spend OUR money. Why not give it back to us and let us decide what to do with it? Because Big Brother knows what is best.
Comment by HMMMM - February 12, 2009 at 9:11 pm
With the 15K plan I was planning on selling mine and building a new one. Not been a first-time buyer in 27 years.
Even at 8K I would have done it. I’ve seen for singles it may only be 4K also. So much for being a good mortgage payer and taxpayer. Maybe at least I can get a buyer for my house that can use the credit.
Comment by Nick - February 12, 2009 at 9:13 pm
Personally, I was afraid of the 15,000 credit because it seemed buyers would be too motivated. I guaranty that if the bill included 15,000 for all home buyers, we would see home prices increase by about 10,000 by the end of the year. Prices would then fall again, and buyers would have gained very little. Also, giving money to all buyers would have spread a lot of money around, but would have done little more than the current plan to decrease the supply of homes on the market. I think that the current plan gives incentive to purchase, without causing a level of demand that will increase prices. I’m seriously considering purchasing a new home. In making the decision, I’m weighing the cost of renting against interest expenses and the inevitable 15% further slide in the value of all homes in America.
Comment by Just a Thought - February 12, 2009 at 9:14 pm
To just a thought and all others. Please be aware that home price “falling” percentages are different for most every area. When we heard about the “bubble” it was in select cities and the rest followed suit but in generally a minor portion so now the housing “bust” is talked about in gerneral terms and as compared to the “bubble” markets. There is plenty of information on line and with local experts who can tell you what your market is doing and has done over the past 2 years. For home buyers; it is important to know your market and not take the generalizations as a solid indicator for all. Get The Facts
Comment by Tim S - February 12, 2009 at 9:32 pm
I’m referring to the Minneapolis, MN market. Home prices are currently at 200% of their values ten years ago. This type of growth has never happened sustainably in America. Also, median home prices rose from 2x the median family income in 2002 (and for many years prior) to 3x median family income currently. That’s a big jump, and it doesn’t seem sustainable. Even if it were sustainable, incomes are falling, which would lead to a drop in prices as well. If someone can tell me what is different about now and into the future that will make homes cost this much, I would be pleased.
Comment by Just a Thought - February 12, 2009 at 9:51 pm
i am buying a home, however i make too much money to qualify for this socialist tax credit. However, my girlfriend fits right into obama’s “middle class” she however, cannot qualify to be on the loan. so i am wondering if i put her on the deed, but not on the loan, can she claim the credit and hence recieve the 8k dollars we need to repair the house?
Comment by this sucks! - February 12, 2009 at 9:52 pm
If your name is on the loan, you are the purchaser of the property. So, your girlfriend would be unable to get the 8,000. In this scenario, she would be “receiving” a home as opposed to “buying” a home.
Comment by Just a Thought - February 12, 2009 at 9:55 pm
I bought in 2008. The NPV (value) of the 0% 7.5K depends on the market interest rate. At 5% its worth $2310, at 10% its $3399.
For me the fact that It is refundable will motivate me to invest it rather than spend it.
I think the 15K incentive would have superficially boosted demand, delaying the eventual arrival of equilibrium in housing prices. That would be good in the short term but we need equilibrium to put this behind us and arrive at prices on those toxic MBS.
The 15K got me thinking how I could exploit it by possibly buying a cheap vacation home through a sibling who rents.
I’m in favor of the 8K gift. It absorbs some of the risk of jumping in in 09 vs waiting till 2010, and incentivizes buyers to make their move sooner rather than later.
As far as the delay in receiving funds till tax season in April 2010, Congress assumes that people will spend it before it comes, if they know its coming to them.
Whats I find really interesting is how the thought of a freebie (15K) clouds consideration on price, potentially in a detrimental way. Some 09 buyers may be underwater more than 15K rather quickly, as the certain markets continue to correct through 2010.
Comment by Jim - February 12, 2009 at 10:16 pm
8 k gift is better than 15 k loan, but does anyone realize how hard it is to get a conventional loan now? I suppose as long as FHA allows it.
Comment by buyer - February 12, 2009 at 10:37 pm
I bought my house on 12/30/2008 but the seller was unable to come and sign with me so she signed the papers the following day. The recording was not done until a week after. I hear now effective date of the $8,000 is 12/312008. Do you know I will qualify for it?
Comment by Clara - February 12, 2009 at 10:43 pm about this idea? Anyone who ever qualified for this tax credit in 2008 should now NOT have to pay it back if they are going to amend the thing at all. That would make it a “true” tax credit…from this point forward and retroactively. Calling the original $7500 credit a tax credit was essentially a joke anyway. True tax credits do not have to be paid back. And furthermore, some people who bought in early 2008 have seen some depreciation of the home they bought and are therefore victims of this downturn. Did I mention the government is highly responsible for creating the problem?
Comment by Brian - February 12, 2009 at 10:49 pm
Got lucky I think. Will close on house next tue. The house we bought (So Cal) is two years old and sold for 354k. We bought it for 129k. Good neighborhood and not trashed. First time home buyer.Been saving for three years. I welcome the 8k. Timing and fiscal responsibility paid off, I hope.
Comment by Larry - February 12, 2009 at 10:58 pm
Can everyone stop complaining that this isn’t fair? I bought a stereo last week. This week it’s on sale. I’ll just have to get over it. The purpose of this credit isn’t to be fair. It’s to motivate potential buyers. There’s no point in giving a windfall credit to someone who already bought a house 6 months ago? Give it to the people who need a little push.
Comment by Lisa - February 12, 2009 at 11:07 pm
$8,000 is still A LOT of money!! My husband and I were looking to buy our first house anyway, and we were excited about the 7,500 that we had to pay back! Then we really got excited about NOT having to pay it back. 15,000 is soooo much money to be handed out. People should be grateful for 8,000. When youre buying a house, what difference does 7,000 make? You can buy all new furniture and some remodels with 8,000, which is what we are planning on doing. Just be happy with what you get, people!
Comment by Ashleigh - February 12, 2009 at 11:35 pm
15,000 dollars would have really helped me to pay off my student loans. I was really looking forward to the 15 grand. I really think that the goernment should give every american citizen 10,000 dollars so we can boost the economy. It hink that it would really help. People would be able to spend the money on different things and boost the economy.
Comment by Ali - February 12, 2009 at 11:58 pm
If we treat everyone the same, then every homeowner in America should get the credit and not have to pay it back. Pretty sweet deal to get an interest free loan and only pay back 500 year for 15 years.
Comment by Anonymous - February 13, 2009 at 1:45 am
People should be glad they have the opportunity to purchase, or have purchased a home in the last couple of years.
Comment by Anonymous - February 13, 2009 at 1:47 am
WTF?? I can’t find anybody else reporting this, but it looks like maybe you can’t claim it on 2008 taxes??
“A $15,000 tax credit many in the housing industry were hoping would boost the market is now cut to $8,000 for first-time home buyers, but UALR Economist Mark Funk says because homeowners won’t see that money for another year or so, it won’t fix any problems right now. “
Comment by JB - February 13, 2009 at 2:05 am
Comment by JB - February 13, 2009 at 2:06 am
Why is it that CA is ready to pass massive tax increases including the tripling of car registration that led to Schwarzenegger’s recall election and all is quiet? Something is really wrong in America. My question is to the expats: is there any country that has it right? Would anyone suggest moving and renouncing one’s citizenship?
Comment by Anonymous - February 13, 2009 at 4:10 am
The homebuyer “stimulus” will become the first “failed” policy of the Obama administration.
What got lost in the subcommittee translation was the true purpose for the homebuyer credit – to stimulate the market so that houses begin to sell again and home prices stabilize. What is left after the damage has been done of this initiative is merely a rather modest gift to a very small number of qualifying people. It will not move the housing markets at all. It is just more money wasted.
First off, if Congress had been really serious about stimulating the market, they would have settled on a credit amount that showed they really meant business. Then they would have opened it up to whichever individuals were willing and able to buy homes at this time. That would have made it possible for some existing homebuyers to be relieved of their homes, at which point they would have been brought into the market as buyers. Now the train of home sales would be moving down the track.
It is important to remember that turning the market around does not depend on who buys homes. What is vital is that homes are sold.
There are people out there today who can choose to buy a second home or a home to rent. Those are the ones to initially target. With good investment opportunities presently limited in the stock market, perhaps the homebuyer credit would attract some to bite on a home as an investment. That is not a bad thing, if it helps to open up the markets.
Comment by Norm - February 13, 2009 at 6:21 am
First time buyer who is closing on his house today.
I am happy as hell. This bill couldn’t be written any better for me.
By the way, the entire Bill is finally available if you goto There is a link to a page that links the entire Bill and there are also links for thorough summaries.
Comment by Derek - February 13, 2009 at 7:02 am
“The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money”- de Tocqueville.
Comment by Alternate Reality - February 13, 2009 at 7:36 am
I closed on my home in Nov 2008. I am disappointed that now the repayment requirement has been eliminated. I plan to forgo the loan. If there’s one thing this crisis should have taught everyone, it’s that you should increase savings and reduce debt - even interest free debt.
Comment by RW - February 13, 2009 at 8:29 am
The wife and I made our list, and started checking out houses when we saw the news of the potential tax break… now were out of the market - either I get a tax break, or I wait for the prices to fall FURTHER… Either way, I win, in this case, the economy suffers longer.
Comment by was buyin, not now... - February 13, 2009 at 9:01 am
15,000 dollars would have really helped me to pay off my student loans. I was really looking forward to the 15 grand. I really think that the goernment should give every american citizen 10,000 dollars so we can boost the economy.
And YOU, Ali, and statements such as this are what’s wrong with this country right now. You want more money? GET A HIGHER PAYING JOB!
Comment by Stpn2me - February 13, 2009 at 9:16 am
COLUMBIA, South Carolina (CNN) — When a debate as important — both in terms of policy and politics — as the one currently rolling around our nation regarding the president’s “stimulus” plan takes place, emotion often takes precedence over fact.
Words are ripped out of context, motives ascribed where none may exist, political strategies implemented with limited regard for actuality. This, then, is the playing field we step onto — as it has long been.
But, as those in South Carolina have often heard me say, it is important to disagree without being disagreeable. So let’s take a clear-eyed look at Paul Begala’s recent defense of the president, which happened to refer to me by name — because what I and others have suggested is far from “doing nothing.”
First, dispense with the notion that there are simply two options here: Support the stimulus package or do nothing. The Washington Post debunked that idea quite convincingly earlier this week.
In truth, there are a variety of options outside a spending bill of unprecedented scope available in this time of considerable economic distress, including, but not limited to, cutting the payroll tax, opening foreign markets through an expansion of our trade agreements, and reducing our corporate tax, which is among the highest worldwide.
Second, we should all be skeptical of any argument centered on the idea of doing something for doing something’s sake. We can’t focus on the why and simply ignore the what. And what does this particular rendition of “doing something” actually do?
According to the Congressional Budget Office, the effects of the bill on job growth as early as 2011 would be miniscule. More distressingly, CBO’s long-term projections estimate that due to “crowding out of private investment,” the package will result in a reduction of our GDP as early as 2019.
As for the jobs created in the short-term, what’s the cost? The Heritage Foundation crunched the president’s own numbers and came up with this startling figure: for every single job the bill creates, American taxpayers will spend $223,000.
Examining the bill’s contents makes clear just how foolhardy that is. What stimulant effect will we get from the $180 million of spending on “diplomatic and consular services?” Should taxpayers really be doling out $300 million for what one newspaper described as “streamlined golf carts?”
And, even though it didn’t make it into the final version of the bill, why would anyone even consider letting the very investment bankers whose companies just pulled down a few hundred million dollars in TARP funds to be in line to receive a $15,000 government credit for buying a new Hamptons beach house?
Finally, history shows us quite clearly that a government cannot spend its way out of an economic downturn. It didn’t work in Japan in the 1990s, when the 10 stimulus packages implemented over an eight year period failed to prevent the “lost decade.” And the New Deal, which the president’s supporters are so quick to point to?
Here are the thoughts of Henry Morgenthau, FDR’s Treasury Secretary: “We have tried spending money. We are spending more than we have ever spent before and it does not work. … I say after eight years of this administration we have just as much unemployment as when we started … And an enormous debt to boot!”
The president’s stimulus represents the largest and most invasive economic action in our government’s history. For a relatively small number of short-term jobs, this administration and this Congress are poised to mortgage the economic future of my four boys and the millions of young Americans just like them. To me, that’s simply not a morally acceptable outcome.
Comment by Alternate Reality - February 13, 2009 at 9:16 am
Euro billig 2010
Mit einem Volumen von 50 Milliarden Euro für 2009 und 2010 ist es das umfangreichste Konjunkturpaket der Nachkriegszeit. Das Gesetz sieht unter anderem eine Förderung der Investitionen bei Bund, Ländern und Gemeinden vor.
Die Fraktionen der großen Koalition von Union und SPD stimmten erwartungsgemäß für das Paket, die Opposition votierte dagegen.
Am kommenden Freitag entscheidet der Bundesrat über das Paket. Baden-Württembergs Ministerpräsident Günther Oettinger (CDU), der eine Koalition aus CDU und FDP anführt, appellierte im Bundesrat in Berlin an die Länder, nach der Einigung der Föderalismuskommission auf eine Schuldenbremse jetzt auch dem Paket zuzustimme
Comment by raivo pommer - February 13, 2009 at 9:27 am
When you extend your return you are supposed to pay what you will owe when you do actually file. If you have a $1000 tax liability but are going to be receiving a $8000 credit then you will actually have a $0 tax liability. You don’t have to pay anything when you extend your return.
Comment by tcreach - CPA - February 13, 2009 at 9:34 am
“If there’s one thing this crisis should have taught everyone, it’s that you should increase savings and reduce debt - even interest free debt.”
Ummmm, what? If someone is going to give you an interest free loan that won’t appear on your credit report or be considered as ‘debt’ you take the money and run.
Honestly, take the money and put it in a savings account or form a CD ladder. It’s free money… take it and save it. Simply turn it down is literally giving up money (you could make a not insignificant amount simply by smartly investing it in FDIC insured sources and then using the same source to pay off the $500 per year).
Comment by ??? - February 13, 2009 at 9:35 am
Some are complaining that they now ‘only’ have a $7,500 interest free loan… well imagine those who bought last March just before the credit came into effect, they go nothing.
If you get the money (credit or free loan) simply treat it as a windfall. The worst thing to do is just go out and spend it. Place it in an insured savings vechicle and treat it as an addition to your ‘rainy day funds.’ If you never need to spend the money then both versions give people versions of real free cold hard cash. If you do need to spend it then the worst case is that you’ve got an interest free loan for some money needed during an emergency… which is still an amazing deal.
Comment by 2008 buyer - February 13, 2009 at 9:41 am
From what i heard you can claim this on your 2008 taxes as occuring on dec 31 if you bought in 09′. so you won’t have to wait until next year to see the $$.
Comment by Adam - February 13, 2009 at 10:03 am
I agree with the prior posters who have commented on the absurdity of $8000 being refundable. If you don’t pay $8000 in taxes, why should get get a $8000 credit? That is not a credit. That is a handout. Welfare. Personally, I don’t care if it’s $8000 or $15,000, but it really ought to be nonrefundable. If you don’t pay taxes, you shouldn’t get this benefit.
Also, to the folks who claim that you need to make $150,000 to pay $15,000 in taxes, I ask: who does your taxes? I make a little more than that and I assure you I pay a LOT more than 10% in income taxes…
Comment by Also Ineligible - February 13, 2009 at 10:30 am
“I closed on my home in Nov 2008. I am disappointed that now the repayment requirement has been eliminated. I plan to forgo the loan.”
Someone is going to give you $7,500 with the only requirement being that by the end of 15 years you need to pay them back $7,500. You’d be stupid not to accept this amazing deal. Not only is it interest free but over time the annual repayment amount decreases in real terms thanks to inflation so although you’re paying back $7,500… the money you pay back is worth less than the money you got to begin with.
If you don’t want it, don’t take it but I hope you realize that you literally are opting to not accept free money (not just the up front amount but potential interest that could be earned, or mortgage interest that could be avoided by putting it towards the principle.)
Comment by People don't get it - February 13, 2009 at 10:44 am
I cannot believe all the people looking for a hand out here. Do you realize that the government must first “steal” this money from productive people (including some of you)then a politician shaves some off for campaign contributers and voters looking for a handout. Then if anything is left you may see $.10 for every dollar they stole from you to begin with.
The governmet caused the housing problem by forcing banks to abandon smart loaning practices and loan to those that would not qualify for a home in a normal world.
If you give a puppy away chances are 2 to 1 he will be abandoned or abused but if you charge a small fee then the new owner respects that puppy more and will take care of him. This also follows home ownership, if you have nothing in it you are OK to walk away.
Quit empowering the politicians to OWN YOUR FUTURE!!!
Comment by Bryan - February 13, 2009 at 10:48 am
Am Belgium (Le Monde 13.02)
und am Deutshland ist Wirtscahtkrise
von Raivo Pommer
Trotz einer Rücklage von fast 17 Milliarden Euro rechnet die Bundesagentur für Arbeit (BA) bereits im kommenden Jahr mit neuen Schulden in Milliardenhöhe. BA-Chef Frank-Jürgen Weise sagte am Freitag in Nürnberg nach der Verabschiedung eines Nachtragsetats, die Behörde rechne bei stagnierendem Wirtschaftswachstum Ende 2010 mit einem Defizit von sechs bis sieben Milliarden Euro.
Der Verwaltungsrat der Behörde ist uneins darüber, ob der Bund über einen Tilgungsfonds oder die Rückkehr in die Defizithaftung für diesen Fehlbetrag aufkommen soll. „Ich würde die Zahlen nicht als gegeben annehmen, sie können schlechter werden, sie können aber auch besser werden, wenn wir gegensteuern“, kommentierte Weise das Defizit-Szenario.
Comment by raivo pommer - February 13, 2009 at 11:24 am
Am Belgium (Le Monde 13.02)
und am Deutshland ist Wirtscahtkrise
von Raivo Pommer
Trotz einer Rücklage von fast 17 Milliarden Euro rechnet die Bundesagentur für Arbeit (BA) bereits im kommenden Jahr mit neuen Schulden in Milliardenhöhe. BA-Chef Frank-Jürgen Weise sagte am Freitag in Nürnberg nach der Verabschiedung eines Nachtragsetats, die Behörde rechne bei stagnierendem Wirtschaftswachstum Ende 2010 mit einem Defizit von sechs bis sieben Milliarden Euro.
Der Verwaltungsrat der Behörde ist uneins darüber, ob der Bund über einen Tilgungsfonds oder die Rückkehr in die Defizithaftung für diesen Fehlbetrag aufkommen soll. „Ich würde die Zahlen nicht als gegeben annehmen, sie können schlechter werden, sie können aber auch besser werden, wenn wir gegensteuern“, kommentierte Weise das Defizit-Szenario.
Comment by EU - February 13, 2009 at 11:26 am
Am Belgium (Le Monde 13.02)
und am Deutshland ist Wirtscahtkrise
von Raivo Pommer
Trotz einer Rücklage von fast 17 Milliarden Euro rechnet die Bundesagentur für Arbeit (BA) bereits im kommenden Jahr mit neuen Schulden in Milliardenhöhe. BA-Chef Frank-Jürgen Weise sagte am Freitag in Nürnberg nach der Verabschiedung eines Nachtragsetats, die Behörde rechne bei stagnierendem Wirtschaftswachstum Ende 2010 mit einem Defizit von sechs bis sieben Milliarden Euro.
Der Verwaltungsrat der Behörde ist uneins darüber, ob der Bund über einen Tilgungsfonds oder die Rückkehr in die Defizithaftung für diesen Fehlbetrag aufkommen soll. „Ich würde die Zahlen nicht als gegeben annehmen, sie können schlechter werden, sie können aber auch besser werden, wenn wir gegensteuern“, kommentierte Weise das Defizit-Szenario.
Comment by Le Monde - February 13, 2009 at 11:43 am
has the date to qualify been changed from aug 31 to dec 1st? I have read both on this thread..I can’t find anything..
Comment by jacob - February 13, 2009 at 12:29 pm
Ashleigh and others,
Yes, $8000 is still a lot of money… unless you don’t get it because of the income cap. A lot of people still don’t understand that the worst areas of the housing markets are houses that cost enough that people who can afford them are above the income cap on this credit. $90k/year is not a lot in some parts of the country. I am in the market but my credit went from $15k to $0 on Wednesday. Now I have to reconsider the “fixer-uppers” I was looking at (the ones were foreclosees trashed them before they left) because I won’t have the cash to do the repairs after I buy them. You can’t roll that cost into the loan, you know.
Too bad no one in Washington understands the practical realities of home-buying.
Comment by JD - February 13, 2009 at 12:52 pm
Granted, if there was no spendulus I’d be fine with it; I just don’t like to see a bunch of money that I, as one of the “evil” rich, will one day have to repay being handed out if I’m not going to at least get my cut. Obama is working to ensure that his hated “wealth gap” is expanded by putting more and more on the government dole and leaving less and less to do all the work. Treat the cause, not the symptoms!
Comment by JD - February 13, 2009 at 12:57 pm
So when are they going to decide????? I thought it was Friday?
Comment by can't wait - February 13, 2009 at 1:43 pm
About all the complaining…. Let’s not forget that this credit is designed to spark more purchasing. They are essentially upping the ante this year. The people who bought last year already bought, so it doesn’t help the economy to just give you money. This new credit is designed to increase sales, and that is exactly what it will do. Nice job with this one.
Comment by kman - February 13, 2009 at 3:03 pm
If I haven’t filed my taxes yet for 2008, but bought a new home in May of 2008, am I still eligible to claim the old $7500 repayable loan credit? I know they will be changing the rules for 2009 buyers, but I still imagine that I would be eligible for the old credit. Can anyone verify?
Comment by Ryan - February 13, 2009 at 3:40 pm
If I purchase a house and receive this $8000 fed tax credit, do I have to pay state tax on that money?
Anyone know?
Comment by State Tax - February 13, 2009 at 3:53 pm
Most homebuyers are not new home buyers….they ALREADY own a home and are moving for any number of reasons….trade up, trade down, relocation, job switch, etc.
By limiting this to FIRST TIMERS, you are taking out the stimulus incentive for most potential home buyers. In addition, since 1st timers tend to feed on the bottom of the housing ladder, this will do nothing to stabilize homes at the conforming loan limit threshold. Good luck!
Comment by Mary Hynes - February 13, 2009 at 3:57 pm
I can’t complain about $8,000 in free cash…although I would have preferred $15,000 of course.
What is ridiculous is what was added or kept instead of my pay day.
The choice was:
Me and thousands of others having that additional money to put in hardwood floors and new appliances in a new home
Money to save endangered mice in swamp lands around San Francisco, to renovate recreational trails throughout the country’s parks, et al.
How can some of these people sleep at night?
Comment by Charles - February 13, 2009 at 4:17 pm
If I had bought a house in 2008 …
Refundable loan - I would use the zero interest loan to pay off a portion of my non-zero interest mortgage. No immediate net benefit to the economy.
Non-refundable credit - I would furnish my house.
Comment by Duncan - February 13, 2009 at 4:44 pm
If I haven’t filed my taxes yet for 2008, but bought a new home in May of 2008, am I still eligible to claim the old $7500 repayable loan credit?
I am tired of the same stupid questions.
I would use the zero interest loan to pay off a portion of my non-zero interest mortgage.
Non-refundable credit - I would furnish my house.
And if I had a million dollars…**sigh***
Comment by Stpn2me - February 13, 2009 at 5:07 pm
This does not change my mind on if I should buy a house or not. Who would make plans on what the government did anyway. This country will never turn around if people sit around and base their descisions (mostly financial) on what the government is doing. Grow a pair, man up, and be independant!
Comment by texas_am_guy - February 13, 2009 at 5:22 pm
We were going to purchase if the 15k was a part of the stimulus. We have the money to buy but are waiting till the housing market drops more or we recoop our losses on the stock market. We lost 15k during the market plumet this fall from our mutual fund that had our downpayment money. So this would have given us an incentive to buy this year. We will simply wait like all the others we know in our position will. We are not first time home buyers so we are not able to use the program approved. Most I know who would be first time homebuyers are broke and cannot purchase a home so yeah for Democrats insuring the housing market will continue to plumet. I will wait till that happens and grab up some forclosures I suppose.
Comment by tab - February 13, 2009 at 5:27 pm
We just purchased a house 2/11/2009 and we claimed the $7500 credit on our 2008 taxes but again it was purchased in 09 so do we have to pay it back???
Comment by Kara - February 13, 2009 at 5:51 pm
Why not make it apply to all those who have qualified for the credit back to April 8th of last year. That does in fact seem more fair….why not do that? No one seems to be able to answer this simple question.
Comment by Brian - February 13, 2009 at 7:21 pm
Is the just for first time “ever” buyers? if you sold a home but have not bought a replacement due to job transfer, is there a time so that would allow you to become a first time buyer in a new area? {smile}
Comment by Tina - February 13, 2009 at 7:38 pm
so if you bought in jan, and already filed your taxes and recieved the 7500, what do yo have to do to recieve the other 500, i know its not much more but every little bit counts
Comment by mike - February 14, 2009 at 9:21 am
My question is the same as Mike’s. I bought in January but already filed my taxes. Does anyone know if I can just do an amended return or something and still qualify for the $8,000 instead of the $7,500?
Comment by Mark M - February 14, 2009 at 9:49 am
This is ridiculous. PEOPLE just buy what you can AFFORD with or without a credit. I am a young professional living in the DC metro area and have not been able to afford a home although I make a decent salary. So I have not purchased one. As a result I am not currently facing foreclosure and have good credit. I will continue to save until I can afford a home, which may be sooner rather than later if prices continue to fall. Everyone should have a home, but everyone does not have the RIGHT to OWN a home.
Comment by Anonymous - February 14, 2009 at 10:18 am
My wife and I were buying this year regardless. So this refundable credit is a bonus. Which we will shrewdly stash away in an interest bearing account for an emergency / rainy day fund. Probably not what Uncle Sam was looking for. People please read the info before you comment. The gov’s was not going to write you a $15K check. The senate credit was non-refundable.
Comment by JC - February 14, 2009 at 10:41 am
I just closed on my first home yesterday!
I make less than 75,000.
This Tax Credit is GREAT for me!!!!
I will use this money for repairs…the bill was written perfectly for someone like me.
Sorry rich people who already own homes.
Comment by Derek - February 14, 2009 at 12:16 pm
Tina, “first time” applies to someone who hasn’t owned a home within the past 36 months.
Comment by Bill - February 14, 2009 at 1:07 pm
I offered a house for 440K and the owner asked for 445K. If the $15,000 credit was passed, I would increase my offer and close the deal in a month. But it did not so no deal was made. I will not consider to buy a house until close to the end of this year. I lost around 18K when selling my first house last year. I do not know how many first time home buyers are out there who will be motivated by the 8K credit. However, how many first time home buyers want to or could buy a house for more than 440K? If the government really wants to activate the housing market, why just focus on first time home buyers? Everyone suffers from the current economy. I want to spend but need something to hold off my scares.
Comment by One potential buyer - February 14, 2009 at 4:08 pm
Qouted text:
Why don’t the media ever ever report this?
Comment by Park Slope Pubby - February 12, 2009 at 12:29 pm
Why doesn’t you ever ever learn english before posting a comment?
Comment by Anonymous - February 14, 2009 at 4:13 pm
the problem with this is the “first time homebuyer” clause…why is it just for first timers?? lift that restriction and it would really help this economy
Comment by snablats - February 14, 2009 at 4:56 pm
I’m benefiting from all of this, but this is really dumb. The government increasing spending is always a bad idea. The individuals who make out this time will lose out on something else they create. All this credit is doing is taking money(higher government spending=higher taxes) from one of us and giving it to someone else, who just so happened to buy a house in the time frame the government decided. When will we learn…voting for democrates or republicans will always increase government control.
Comment by Sean - February 14, 2009 at 5:02 pm
PS “one potential buyer” if you’re buying a $450k home, you are either over the income limitation rules, therefore you wouldn’t receive the credit no matter how much it is, or you’re buying a home you can’t afford.
Comment by Sean - February 14, 2009 at 5:08 pm
Yeah, and buying in on the notion that this stimulus package is going to increase our nation’s GDP is also a fake pushed by Obama’s economists. GDP is calculate as follows: GDP = consumption + gross investment + government spending + (exports − imports), or,
GDP = C + I + G + (X − M). So if government spending just keeps on increasing, the GDP also increases. This does NOT mean that the country is doing better; furthermore, its actually becoming worse. The GDP would increase if the US Navy would order 500 Missile Cruiser and Aircraft Carriers and then had blown them up in the middle of the Pacific!
Comment by Vasa - February 14, 2009 at 5:58 pm
PS “Sean” - do you really need to earn more than 150K (per couple) in order to afford a 445K house? How could you do your math if you do not know how much is the equity? Maybe a 445K house is truly out of the range for a middle-income couple. OK, just wait for the price to go further down.
Comment by One potential buyer - February 14, 2009 at 6:03 pm
Why is everyone complaining that is wasn’t $15,000? An $8000 refundable tax credit is still a nice amount to receive especially since it does not have to be paid back. And since it is aimed at first time home buyers, it will help the people who will need it most, not the rich who can afford and already have many homes. I agree its not a complete fix to the housing situation, but it will help clear some of the excess inventory of homes. Next goal, getting mortgage rates to 4%.
Comment by Duy D - February 15, 2009 at 1:41 am
We bought our home in June 08 when my husband had been at his job for 4 years and we felt comfortable buying our first home. I also had my part time job and stayed at home with our three children. A week before Thanksgiving the company I worked for closed there doors and two months later my husband lost his job. The 7500 was a true gift, 15,000 would have been a miracle!! Not to bail us out of our present situation, but use on our new home which would stimulate the building industry. That same industry where my huband lost his job. The plan should be to help those who have been effected by 2008’s economy also because that is where it all began. 2009 participants should have to pay it back too! It’s still a gift and we are greatful!
Comment by Victim of the economy - February 15, 2009 at 6:07 am
To One potential buyer - You were 5K apart on a 450K house and neither side was willing/able to close the deal? That’s very odd.
Comment by Bill - February 15, 2009 at 11:42 am
For the DC metro area, even $30K would not be a motivator to buy, knowing the prices have not yet adjusted and have another 30% to go. The tax credit needs to adjust for the cost of living differential since there is so much downside loss potential. The free markets have to find their own bottoms. Everything else is putting a bandage on the wound.
Comment by Georgina Ross - February 15, 2009 at 11:55 am

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