Agent Melissa Hayes says she can thank Uncle Sam for helping her sell 25 houses to first-time homebuyers last year.
“Even in this economy, business has been steady,” the Crye-Leike agent said.
To help prop up the beleaguered housing market, the federal Recovery and Reinvestment Act of 2009 initiated a tax credit for first-time homebuyers of up to $8,000 or 10 percent of the purchase price of the home. Condos, townhouses, mobile homes, and houseboats up to $800,000 all qualified as long as they were used as a primary residence.
To qualify for the credit, first-time homebuyers had to earn less than $75,000 annually if single and less than $150,000 if married and could not have owned a home in the past three years.
“The majority of the people I worked with have been first-time homebuyers,” Hayes said. “The houses they’ve purchased have been around $120,000 to $150,000.”
After hearing about the program, Bryan Tushek and his fiancée Storey Rowe decided to purchase a four-bedroom home for $200,000 in May.
“It was probably around March of last year when I heard about the credit,” Tushek said. “I was already thinking about purchasing, but that jump-started it. We decided to purchase earlier than we had planned.”
The program was set to expire in November of last year, but Congress extended it through April and expanded it to include existing homeowners.
“We saw a push when people thought they had to close by the end of November,” Hayes said. “But now people who own homes are excited.”
Along with the other changes to the program, a first-time homebuyer now can earn up to $125,000 a year if single and up to $225,000 if married.
Existing homeowners wanting to take advantage of the $6,500 tax credit must meet the same salary requirements and have lived in their current house for at least three years.
Although the extension expires at the end of April, binding contracts to purchase houses made by April 30th will be eligible as long as the closing dates are by June 30th.
