Tax Credit Extension

The “Dodd-Lieberman-Isakson” amendment would extend the tax credit to June 30, 2010.  It would expand the credit to any homebuyer and raise the income limits to $150,000 ($300,000 for joint returns).  The amount of the tax credit would remain at $8,000.   

Prospects:  We still believe the prospects are good for extension of the tax credit.  There is real concern in the Administration about the strength of the economic recovery.  Treasury Secretary Geithner was quoted in the November 2^nd Business Week magazine stating: “we’re not going to make the mistake many countries made in the past of putting the brakes on too early and creating the risk of a weaker recovery with even higher levels of unemployment.”  On the negative side, the stories about fraud in tax credit program (e.g. children and current homeowners receiving the tax credit)  and concerns about the program cost obviously do not help. 

While the industry trade associations are making a major push for the expansion of the tax credit to all homeowners, it appears unlikely that it will be expanded beyond first-time homebuyers).  We will keep you apprised.

 Extension of Temporary Mortgage Limits

 We also could hear this week or next about whether the temporary mortgage limits will be extended for another year.   We are still optimistic that the temporary limits will be extended.  The Administration fully understands that the jumbo mortgage market is not functioning properly and that the GSEs and FHA will play a critical role for the 

There will be an important vote in the Senate this week on the housing tax credit provision.  The “Dodd-Lieberman-Isakson” amendment would extend the tax credit to June 30, 2010.  It would expand the credit to any homebuyer and raise the income limits to $150,000 ($300,000 for joint returns).  The amount of the tax credit would remain at $8,000.   

 

Prospects:  We still believe the prospects are good for extension of the tax credit.  There is real concern in the Administration about the strength of the economic recovery.  Treasury Secretary Geithner was quoted in the November 2^nd Business Week magazine stating: “we’re not going to make the mistake many countries made in the past of putting the brakes on too early and creating the risk of a weaker recovery with even higher levels of unemployment.”  On the negative side, the stories about fraud in tax credit program (e.g. children and current homeowners receiving the tax credit)  and concerns about the program cost obviously do not help. 

 

While the industry trade associations are making a major push for the expansion of the tax credit to all homeowners, it appears unlikely that it will be expanded beyond first-time homebuyers).  We will keep you apprised.

 

Extension of Temporary Mortgage Limits

 

We also could hear this week or next about whether the temporary mortgage limits will be extended for another year.   We are still optimistic that the temporary limits will be extended.  The Administration fully understands that the jumbo mortgage market is not functioning properly and that the GSEs and FHA will play a critical role for the

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