Government extension of existing tax credits and creation of new benefits a positive step for residential real estate market

New tax credits will help continue to further activity within Lincoln’s residential real estate market

The extension and expansion of the existing homebuyer tax credit programs are positive steps for the nation’s residential real estate market, says Ron Peltier, Chairman and CEO of HomeServices of America, Inc., a Berkshire Hathaway affiliate, and the nation’s second-largest independent residential real estate brokerage (

The existing homebuyer tax credit program, which has been in effect since January 2009, provides up to $8,000 in tax credits for individuals purchasing their first home, as well as for those who have not owned a home for three years has been extended into 2010. Under the new extended legislation, the current Nov. 30, 2009 deadline to close on a home has been expanded to June 30, 2010.

The newly-enacted tax credit provides eligible home buyers who have lived in their current home consecutively for five of the previous eight years with up to $6,500 in tax credits.

Qualified, prospective homebuyers looking to capitalize on either tax incentive will need to have a signed purchase agreement by April 30, 2010, and will need to close on their home by June 30, 2010.

“It is an unprecented time to buy a home,” said Gene Ward, managing broker and team leader of Woods Bros Realty. “The low interest rates and these tax incentives make it the perfect storm to make a move. Our local market will especially benefit because of our low home prices and cost of living.”

“We view this as an extremely positive step for our industry,” adds Peltier. “The extension of the homebuyer tax credit and, in particular, expanding the tax credit to include current homeowners, creates motivation for those buyers that have been contemplating a home purchase. This creates a tremendous incentive and makes this the perfect opportunity to act now.”

The tax credit is available for the purchase of principal residences only, and the home must cost no more than $800,000. Vacation and second homes are not eligible.

Individual buyers must have an annual income of no more than $125,000, or $225,000 for those who file jointly. Buyers who have served in the military outside of the U.S. for at least 90 days will receive a 12-month extension on the tax credit.

“Our industry is one of the nation’s key economic drivers,” concludes Peltier. “We are confident in its long-term viability and in its chief mission of helping facilitate the American dream of owning a home.”

Woods Bros Realty, an affiliate of HomeServices of America, is a full-service company offering 120 years of expertise in real estate as well as experience in mortgage, title, closing, and insurance services. Providing an easier way to buy and sell, nearly 300 sales associates work with clients in Lincoln, Seward, Beatrice, York, Grand Island, and southeast and northeast Nebraska. For more information about Woods Bros Realty, visit

About HomeServices of America
HomeServices of America, Inc., based in Minneapolis, Minn., is the second-largest homeownership service provider in the United States. Owned by MidAmerican Energy Holdings Company, an affiliate of Berkshire Hathaway Inc., HomeServices’ operating companies offer integrated real estate services, including brokerage services, mortgage originations, title and closing services, property and casualty insurance, home warranties and other homeownership services. HomeServices Relocation, LLC is the full-service relocation arm of HomeServices of America which provides every aspect of domestic and international relocation to corporations around the world. HomeServices operates in 20 states under the following residential real estate brand names: Carol Jones REALTORS; CBSHOME Real Estate; Champion Realty Inc.; Edina Realty; EWM REALTORS; Harry Norman, REALTORS; HOME Real Estate; Huff Realty; Iowa Realty; Koenig & Strey GMAC Real Estate; Long Companies; Prudential California Realty; Prudential Carolinas Realty; Prudential First Realty; Prudential York Simpson Underwood; RealtySouth; Rector-Hayden REALTORS; Reece & Nichols; Roberts Brothers Inc.; Semonin REALTORS and Woods Bros Realty. Information about HomeServices and the locations of its subsidiary companies is available at

BREAKING NEWS: Obama Signs Homebuyer Tax Credit Extension

RISMEDIA, November 6, 2009—President Barack Obama has approved the first-time homebuyer tax credit extension which will extend the tax credit until April 30, 2010.

The extension is part of a $24 billion economic stimulus bill that will extend the $8,000 tax credit for homebuyers who are purchasing their first home from the current November 30 deadline and expands the program to offer a credit of $6,500 to homeowners who have lived in their current home for at least five years and are seeking to relocate.

The following details apply to the homebuyer tax credit expansion:

Who is Eligible

  • First-time homebuyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.
  • Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.
  • All U.S. citizens who file taxes are eligible to participate in the program.

Income Limits

Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.

  • For married couples filing a joint return, the combined income limit is $225,000.
  • Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
  • The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.

Effective Dates

The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.

Types of Homes that Qualify

All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.

Tax Credit is Refundable

A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.

For example:

  • A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit).
  • A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).
  • All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return.

Payback Provisions

The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

The  site is being updated and should have more detailed information on the new tax credit next week.

Breaking News: House votes to expand homebuyer tax credit

By STEPHEN OHLEMACHER (View full Associated Press here.)

WASHINGTON — Buying a home is about to get cheaper for a whole new crop of homebuyers — $6,500 cheaper.

First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package enacted earlier this year. But with the program scheduled to expire at the end of November, the House voted 403-12 Thursday to extend and expand the tax credit to include many buyers who already own homes. The Senate approved the measure Wednesday, and President Barack Obama is expected to sign it.

Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers — or anyone who hasn’t owned a home in the last three years — would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30.

“This is probably the last extension,” said Sen. Johnny Isakson, R-Ga., a former real estate executive who championed the credits.

Senate Clears Homebuyer Tax Credit Extension to Pass This Week

Published: Nov. 3, 2009
By Steve Cook Real Estate Economy Watch

After two weeks of delay, the Senate last night cleared the way to pass a seven month extension and expansion of the tax credit for homebuyers. By an 85 to 2 roll call vote, the Senate voted to cut off debate on a package of measures that includes the homebuyer credit, making it virtually certain that the legislation will reach President Obama for his signature this week.

The homebuyer tax credit, due to expire in 28 days, would be extended through April 30 of next year. First-time buyers who are in process of making a purchased would not need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline.

For the first time, the legislation cleared last night makes move-up buyers as well as first-time buyers would be eligible for a credit. The $8,000 maximum first-timer credit will continue and will now available to couples with income up to $225,000, a nearly $55,000 increase above the level in existing law. A new $6,500 maximum credit would also be available to move-up homeowners who have lived in their current residence for five of the prior eight years.

For the rest of this article from, click here.

Senate bill amended to extend, expand credit

By Inman News, Monday, November 2, 2009.

Congress has approved a one-year extension of higher loan limits for mortgages backed by the Federal Housing Administration, Fannie Mae or Freddie Mac, and an amendment that would extend the first-time homebuyer tax credit has been incorporated into a Senate bill to prolong unemployment benefits.

A procedural vote on the unemployment benefit legislation, HR 3548, is expected today, Congressional Quarterly reported, with final passage by the end of the week.

An amendment to the bill, introduced Thursday by majority leader Sen. Harry Reid, D-Nev., would extend the tax credit to apply to homes under contract by May 1. Homebuyers would have to close by July 1 to claim a credit equal to 10 percent of the home’s purchase price, up to $8,000.

That’s the same limit in currently in place for first-time homebuyers claiming a tax credit that’s scheduled to expire Nov. 30.

But Reid’s amendment would also expand the tax credit to allow longtime residents of the same principal residence to claim a tax credit of up to $6,500. Homebuyers would have to have owned and used their principal residence for any five-consecutive-year period during the past eight years to claim the exception for longtime residents.

The amendment would also expand income limits from $75,000 to $125,000 for individuals and from $125,000 to $250,000 for couples, but the credit could not be claimed on purchases of homes exceeding $800,000. The amendment would also set a minimum age requirement of 18 to claim the credit.

The extension is supported by the Obama administration, which also urged Congress last week to approve a one-year extension of the temporary $729,750 loan limit in high-cost housing markets for mortgages backed by FHA, Fannie Mae or Freddie Mac.

The House and Senate passed a resolution Thursday to extend the limits through 2010, which the Obama administration was expected to sign on Friday or Saturday, the National Association of Realtors said in welcoming the move by lawmakers.

FHA, Fannie and Freddie will continue to be authorized to guarantee loans of up to 125 percent of local median home sales prices, up to a maximum of $729,750 in high-cost areas. The floor for FHA in normal markets will remain $271,050, and $417,000 for Fannie Mae and Freddie Mac.

In a statement, NAR President Charles McMillan said the higher limits will help motivate qualified buyers to purchase homes in the middle-income and higher brackets, which have not shown the same improvement in recent months as homes at the lower end of the price spectrum.

Tax credit helps local real estate market

By MATT OLBERDING / Lincoln Journal Star

How big an effect has the $8,000 tax credit for first-time homebuyers had on the local real estate market?

Consider these numbers:

  • Third-quarter sales of existing homes and homes overall were at their highest levels since 2005.
  • Sales of new homes, though still at multi-year lows, were up more than 25 percent in the third quarter compared with the same quarter a year ago.
  • September pending sales – home sales under contract but not yet finalized – were at their highest level ever for the month.
  • In the $160,000-and- under category, which local Realtors consider to be the “starter home” market, sales are up 25 percent for the year.

“I think we’ve certainly seen the effect of (the tax credit), especially in the lower price ranges,” said Doug Rotthaus, executive vice president of the Realtors Association of Lincoln.

In a blog post last month at, Gene Brake, CEO of HomeServices of Nebraska and Woods Bros Realty, said approximately one-third of recent home sales were to first-time buyers.

“… clearly the program has been wildly successful,” Brake said in his post.

According to the Internal Revenue Service, more than 1.5 million homebuyers have benefited from the tax credit. The National Association of Realtors estimates that 355,000 of those buyers — or nearly a quarter — would not have bought without the credit.

The Realtors Association on Friday cited the tax credit for spurring sales of existing homes nationally, which were up 9.4 percent in September.

But the wildly successful program will come to an end soon if the government doesn’t extend it.

The tax credit is scheduled to expire at the end of November, and buyers must close on their purchase by Nov. 30 to get the credit.

Since it typically takes a minimum of 30 days to close, time is running out.

Any hangup with loan approval or appraisals could extend that time, meaning for some buyers the window may have already closed.

But there is hope for those wanting to see the credit continue. Read the rest of this article from the Journal Star here.

Record number of homes placed under contract in September

According to Midlands MLS residential statistics, more homes were placed under contract in September than any other time in history.

A total of 404 single-family residential listings were placed under contract, a 40 percent increase over the same time in 2008. Of those homes, 52 percent of them were priced $80,000 – $159,999, which could be a result of first-time home buyers trying to get their transactions closed in time to take advantage of the $8,000 tax stimulus.

Industry’s Most Powerful Associations Send Letter to Administration Advocating for Extension of Homebuyer Tax Credit

RISMEDIA, October 20, 2009-The Mortgage Bankers Association (MBA) along with the National Association of Realtors (NAR) and the National Association of Homebuilders (NAHB) sent a letter to senior Obama Administration officials yesterday requesting their support for a 12-month extension of the first-time homebuyer tax credit.The letter, addressed to Treasury Secretary Geithner, HUD Secretary Donovan and National Economic Council Chair Summers, outlines why the three organizations believe that the tax credit has had a stimulative effect on not only the housing market, but on the U.S. economy as a whole.

A copy of the letter is below:

Continue reading “Industry’s Most Powerful Associations Send Letter to Administration Advocating for Extension of Homebuyer Tax Credit”

Clock Ticking on $8,000 Tax Credit

Time is running out for homebuyers, who must close by November 30, 2009.

The government’s $8,000 tax credit for first-time homebuyers has been extremely successful, but time is running out to capitalize on this unique opportunity.

The tax credit, available for first-time homebuyers, as well as to individuals who have not owned a principal residence in the 3-year period prior to purchase, expires November 30, 2009. That means that home loans closed past that date will not qualify.

Since it generally takes a couple of weeks to negotiate a purchase, then 30 to 45 days to close on a loan – with more stringent appraisal and disclosure requirements adding more time to the closing process – it is crucial that those wanting to take advantage of the incentive realistically select a home by mid-October to meet the deadline.

“This incentive has brought the dream of homeownership to literally thousands of individuals and families,” said Ron Peltier, chairman and CEO of HomeServices of America, “but time is running out, and there are not guarantees at this point that congress will extend the program.”

“New homeowners have accounted for approximately one-third of recent home purchases,” adds Gene Brake, CEO of HomeServices of Nebraska and Woods Bros Realty, “so clearly the program has been wildly successful. But like all good things, there is an end, so don’t miss a chance to take advantage of this once-in-a-lifetime opportunity.”

The tax credit is available for homes purchased before December 1, 2009. Single-family, townhomes, or condominiums qualify for the tax credit, provided that the home is used as the principal residence. This also includes new construction homes if occupied by December 1, 2009.

The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000. Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

This new tax credit can help ease the transition and help cover the new expenses that come with home ownership. The tax credit does not have to be repaid, as long as buyers stay in their new home for at least three years after purchase. IRS Form 5405 gives all the details and as always, consult with your personal tax advisor.

For more information, contact us at (800) 535-4707 or visit

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