First-time homebuyer tax credit extension: Truths and myths

There's a lot of discussion going on about the possible extension of the first-time homebuyer tax credit. Unfortunately, there also appears to be quite a few rumors and unconfirmed statements, as well.

Let's begin by laying those out on the table. For starters, the tax credit has not yet been extended. At least not as of 12:30pm Eastern, October 29, 2009.

Also, the proposal that is currently under discussion is to extend the credit for first-time buyers who sign to buy by April 30, 2010. The current bill required the home to close before December 1 of this year. Since home buyers can't control all aspects of the time it takes to close on a home purchase, the current bill left buyers confused and real estate agents, as well as mortgage and title companies, rushing to get deals finished by the deadline.

The current proposal also extends a credit of up to $6,500 to home owners who have lived in their current home for at least five years, and are "upgrading" their home. The language in that proposal currently seems a little sketchy. Did they have to own the home for five years? What if they had a lease-to-purchase deal? Define "upgrade." Does that mean move to a bigger house, a house that costs more, or a house that is worth more? If worth more, how are those numbers being determined?

In the ever-competing, "I got the story first" news industry, MSNBC.com reported Wednesday that an extension to the current $8,000 credit was agreed upon by senators. Or was it? The headline and first few paragraphs of the article appear to state that the credit was extended, but one of last sentences in the article reads: "The Senate could vote on the overall bill as early as Thursday, but lawmakers were still haggling over several unrelated amendments Wednesday evening." Read: the bill has not yet passed, and could still change quite a bit before (and if) it does.

According to a CNNMoney.com article last updated about 45 minutes ago, there is growing support for a bill to extend the first-time homebuyer tax credit, but nothing is finalized. The current idea being discussed includes a credit of up to $6,500 for "homeowners looking to trade up to a bigger primary residence and who have already lived in their current home for five years." This plan would extend the credit to those who sign to buy a new home by April 30, 2010.

As the tax credit discussion grows, I'll work to make sense of it all and keep the blog updated with new facts. Check back to www.dripmarketingblog.com for more info.