Will tax credit for ‘move-up’ homebuyers spur you to act?

Late Wednesday, the Senate voted 98-0 to extend the first-time homebuyer tax credit of $8,000 to April 30.

The Senate also took action to spur sales to “move-up” buyers, AJC reporter Bob Keefe writes.

Legislation, which still must be passed by the House, would provide a $6,500 tax credit for homebuyers, as long as they had been in their previous home for at least five years.

The tax credits would be limited to homebuyers who make $125,000 or less as an individual or $225,000 or less as a couple. The cost of the home being purchased may not exceed $800,000.

If these provisions become law, will it push you off the fence? Why or why not?

53 comments Add your comment

Tracy , San Antonio TX

November 5th, 2009
8:00 am

Short answer, “NO!” This won’t help us one bit!! We are, once again, unqualified for any sort of help! We bought a house in 2006, which means we wouldn’t get help if we were able to sell. Our current home is worth $25,000 less than we paid in 2006 due to all the foreclosures around us. We need to sell next spring and actually move UP, but because we would wipe out our liquid savings at closing, we are stuck! Why can’t Congress help out people who bought at the top of the market and need to sell for a new job opportunity?? It just makes you want to give up and mail in keys; many are doing just that.

Tony Williams

November 5th, 2009
9:01 am

The first round was very useful in putting first time buyers in the market that would not have done so without the credit. This brought down the amount of inventory. This credit not only will assist new buyers, but move up buyers as well. With more inventory taken off the market, basic economic principles will improve the market. With more demand and less inventory the prices will go up. More homeowners problems will be cured and we will see a faster recovery. As a Realtor in the Atlanta Metro area for over 30 years, I have seen business cycles before. This new incentive will definitely help.


November 5th, 2009
9:08 am

So we didn’t learn the first time around, so we’re doing it again. Giving credits to people who can’t afford a home is a band-aid at best. Within 2 years we will be back in the same boat only deeper. Get the GD government out of the banking, car, insurance business and then maybe “We The People” can fix the mess the Federal Government created.

Scott Smithson

November 5th, 2009
9:09 am

In addition to the current homebuyer tax credit of $8,000, are there other incentives for first-time buyers? And could two buyers (not related) co-purchase a property and both claim homebuyer tax credit (e.g., $8,000 for first-time buyer, $6,500 for other)? Thank you.

Lloyd Braun

November 5th, 2009
9:20 am

Yes. Like all retards, I am going to buy a 1/2 million dollar depreciating asset for $8,000 of government middle-class welfare.

Mazel tov,

Andy in Blairsville

November 5th, 2009
9:34 am

If the government is going to give handouts of taxpayer money toward the purchase of homes why limit it to first time home buyers only? I’m sure there are many people like myself who are currently looking at 2nd homes (foreclosures) now either as investment properties or vacation properties. $8000 is a bit of a joke but hey its better than nothing on April 15th.


November 5th, 2009
9:44 am

I’d certainly partake in this new credit, however, my condominium is now worth less than 50% of what I paid for it during 2004. The city of Atlanta is ruined by crime and corruption. 5 years, 20% down, and STILL would have to come out of pocket $60,000 to be able to leave.

Thanks for NOTHING Shirley.


November 5th, 2009
9:44 am

Absolutely!!! Finally my family will benefit from some the stimulus that has been handed out. While everybody was committing financial suicide, we lived within our means, spent little and saved a lot allowing us to capitalize on an opportunity of sinking home prices and interest rates. Now we get a little extra reward for our efforts!


November 5th, 2009
10:39 am

The entire goal was to prevent speculators that caused so much of the damage in the first place. Handing tax credits to people who already have homes would simply shuffle inventory and make realtors some money w/o addressing the problem of foreclosure inventory. The new credit subsidizes some people to move up but is structured to keep people who overbought during the boom from swapping since they’ll likely owe more than the 6,500 on the home anyway. If I already had a home that I overpaid for, I’d simply use the credit to buy a 2nd home at today’s depressed prices and walk away on the 1st one. I’m sure lots of people were hoping for that one but the 5 year rule is to reduce that.

I applied for the 8k rebate check and still haven’t gotten it after 3 months. My income is over the original limits but I have to put lots into my 401k to reduce my annual tax liability. I bought a 1bdr condo in Midtown for about 60k less than it was last year when I first started looking at the same building. I elected to rent in the area for a year and make sure it was for me. I’ve been holding out on buying despite having the income for the past 4 yrs b/c I felt the market was overpriced. The 8k certainly helped making the decision a bit easier since I’m not completely convinced the market has bottomed and I’m still planning on holding for close to a decade.

Saying it’s welfare is a bit stupid since you’ve got to have at least enough income to qualify for a mortgage in this economy. I brought 20% for a down payment and the mortgage is less than 1.8X my annual salary and I still had to jump through lots of underwriting hoops to keep a sub 5% loan. I’ve been paying 20-25k in taxes between federal/state/FICA since ‘05 and never gotten more than $300 on my tax return. I’ve had the same job for 3yrs and a 800 credit score and I probably paid more in taxes as a percentage than most of the people on this blog simply b/c I had no deductions as a single person.

Housing has always been subsidized w/ mortgage deductions and other things like Fannie Mae conforming loans. You can see just how much it is when you try to get a jumbo loan and the interest rate is 1/2-1% higher. The original structure of this credit was to the few qualified people off the sidelines and it’s been somewhat of a success. Complaining b/c you can’t take advantage now is as stupid as not realizing you listened to the hype and bet that housing was never going down. Would you have handed back the cash you got if your house appreciated 10%/yr? Watch any home finding show on HGTV that was filmed before ‘08 and you almost every person believe they’d get double digit returns which justified their buying a home 5X their income on 100% financing on a house that cost 50% less only 2-3yrs before.


November 5th, 2009
10:41 am

I feel sorry for *Certainly*. I sold my condo early last summer before things really tanked around here. So glad i got out of it and bought a house which I didnt pay full price for either.


November 5th, 2009
10:58 am

No it won’t sure me to act. This is another temporary fix to prop up the econimy. Nothing more. Just like cash for clunkers. Helps while it was in place but now we are right back where we were. It had no lasting benifit.

To JD….Nice that you will be able to profit off of others misfortune. Hurray for you.


November 5th, 2009
11:10 am

I will be taking advantage of this opportunity! Yes, I will be selling my house for $15k less that what it would have sold for 2 years ago, but I will make up for it in one of the MANY fantastic deals that are out there. I am thankful to be a “saver” instead of a “spender” mixed with a little bit of good luck.


November 5th, 2009
11:13 am

How is the $6500 going to help. You have to own your home for 5 years. If not – your out. So people that are moving to take new jobs and stuff that have not had their existing home for 5 years are out. Anyone that wants to take advantage of the low interest rates and move up but has not been in their home for 5 years are out.
Who dreamed up the 5 year thing? That was dumb.


November 5th, 2009
11:20 am

How about someone like me who has been renting for two years? And I owned my home before that for eight years. I can afford the monthly payments but there is no help for someone like me for a credit. Who comes up with these ideas. Let’s help these people over here but not those ones over there. Find a solution where everyone benefits.


November 5th, 2009
11:43 am

Tony…When you buy a house don’t you plan on holding it for 5 years anyways. Why is everyone complaining if they just bought it. Once you have owned your home 5 years the market will be fine and you won’t have a problem or need a credit. If yu get a great job offer somewhere else then rent it and take the tax deductions available to landlords.


November 5th, 2009
11:54 am

One word, starts with “N” and ends with “O” The government is a ridiculous commodity. NO, I will not sell my house to move up in the market, because I closed on the original loan in 2002 and have saw the value go way up. How about bailing out or giving a tax credit for home owners that still have their house after the credit/mortgage crisis??? or bailing out people with high student loan debt?


November 5th, 2009
11:59 am

i’m glad about the extension. im a first time homebuyer and while $8000 dollars isnt a large sum, in the grand scheme of things, it certainly helps out alot. i am going to start looking and take advantage of this bail out money while i can.


November 5th, 2009
12:05 pm

Ok can someone make me understand this. I have to owned my house for 5 yrs in order to buy another house and get the $6500 credit. Or just have to own my house for 5 yrs and and get the credit.


November 5th, 2009
12:09 pm

Thank you, Tracy from TX. We are in the same boat. When I saw the headline I got a little excited, but am confused on the stipulations. We also bought in July of 2006 and since then the value has dropped tremendously. I’m confused…


November 5th, 2009
12:17 pm

Hi Starbuck. Sounds like the current propsal would be $6,500 if you buy a new primary residence but only if you have owned your current home for 5 years. You don’t get the credit it you don’t buy a new home since the idea is to spur home sales. If you haven’t owned in the last 3 years then you get the $8k for buying a home.


November 5th, 2009
12:25 pm

If you bought in 2006 and you are upside down you would still have to bring money to the table to sell your house, then would you qualify for a new mortgage to buy a new house and get the $6,500. A lot of questions before you get the credit. If you can qualify you may get a better house with the deals out there


November 5th, 2009
12:42 pm

I have owned a house for 5 years, but the last year it has been rented out since I graduated from school and moved back home. That pretty much disqualifies me from any credit right? Sigh.. our government is destroying this country.


November 5th, 2009
1:40 pm

So wait people who have owned a home for five years or less are just going to qualify for a 6500 tax credit?? am i understanding this correctly or do you have to buy or sell your home to get that???


November 5th, 2009
1:48 pm

The credit is for HOMEBUYERS ONLY, You have to buy a home (selling does not count). In addition you have to be 1st time buyer (not owned in last 3 yrs) OR you have to have lived in your current home 5 years and be buying a new primary residence.


November 5th, 2009
2:09 pm

Absolutely. The $6500 couldn’t come at a better time. Prices are low, and I’ve been looking and putting in offers. I’ve already pitched in my $20 to help the neighbor down the street buy a new car with the cash for clunkers program, so now he can pitch in $32.50 to help me move up to a better house. I’m going to take a $50k loss when I sell my old house as it is (since I don’t believe it’s morally right to withold payment of $ owed to lenders when you have the ability to repay). Might as well get a few bucks back in the deal.


November 5th, 2009
3:04 pm

Who said you have to sell your first home you lived in 5 of the past 8 years? Say you lived in your home for 5 of the past 8 years, kept it as a rental, and now went out and bought a house greater in value. Would you be eligible for the $6,500?

Dennis Norman

November 5th, 2009
3:10 pm

Tax Credit Update – The bill was just passed by the House of Representatives – The President is expected to sign it into law today or tomorrow..I have complete details as well as links to the bill text in an updated post I just did at:



November 5th, 2009
3:11 pm

I’m just very curious where all you folks have found the jobs to maintain your credit to afford ‘moving up’ or anything else in the housing market??!!

I’ve got 18 years in my profession, company closed, I’ve been looking high and low for a new job EVERY SINGLE DAY, ANY KIND OF PAYING JOB for over 8 months now… credit is now shot, behind on current mortgage a month…

NOT whinning or crying, I just find it unbelievable that the retarded government is worrying about helping people out with freakin’ ‘moving up’ when there are 100’s of thousands of us still wondering how the hell we’re going to eat a month from now.

Personally I think it’s enough to make you SICK.

I voted for this POTUS, could shoot myself in the head for doing so at this point.


November 5th, 2009
3:26 pm

There seems to be a lot of whinners out there. All of this money the government is giving out is just a loan. You and I will have to repay it later. Yes, you, your children and grandchildren. Quit whinning and expecting a handout. Cut off all of these handouts to people that didn’t deserve to be helped in the first place.


November 5th, 2009
3:52 pm

PF – here’s the deal. Without the tax credit, I would have bought traded up to a house from a condo anyway, and only my Realtor would have benefited. With the tax credit, I will spend an additional $6500 for furniture and services to fix the place up. This is money in the pockets of companies and people who need to boost their sales, so they can buy more goods and services. The companies offering these goods and services see business picking up, and start to hire again, and YOU get a job. It “stimulates” the economy. Get it?


November 5th, 2009
3:59 pm

Laker…sounds like a reasonable thing to rent your current house you lived in for 5 year and buy a new one to live in. This would help the goal of selling houses without putting another one on the market.

BUT the key would be if you can qualify to carry both mortgages according to the bank. Especially if you have not yet rented the 1st house you’d need enough income to qualify for both at a minimum. I suspect banks are not very kind to first time landlords right now when it comes to lending for investment properties too. I know its nearly impossible to refi investment properties at the moment.


November 5th, 2009
4:00 pm

I wish hanging on for five years was the solution Noah. We closed March 2006, values down about 60%. We put 20% down and are still 100% underwater. Yes 100% underwater. Appraisers are now coming in very low keeping further downward pressure on local prices. This is yet another slap in the face to those in dire straights with their housing situation. What is a realistic rate of appreciation in this market to overcome being 100% upside down at today’s values? None of the government programs apply: debt:income is below 31%, LTV is above 125%, lived in the house for 4 years (not the 5 required for this program). So all of the government intervention is designed to help people marginally in trouble not those living financial catastrophes. I would love to be 25k upside down not 120k upside down. The former qualifies for help, we do not. At 6.375%, our interest payment on our 30 year fixed is 1300 a month so we can’t even really accelerate the payoff effectively.

Mike from Chicago

November 5th, 2009
4:05 pm

I want to hear the “logic” on the five years. I have been a responsible homeowner for seven of the last eight years, but have never been one place more than five. I bought at the peak in 2006 and had to move across the country for a job change in 2008. I sold my house at a substantial loss and paid up. I DID NOT FORECLOSE OR DO A SHORT SALE. I paid my obligation and now I have to rent with almost no money for a downpayment towards a new home. $6500 would have been nice but I know there are worse problems out there. I’m starting to feel foolish for not just walking away, but hey, I sleep at night because my signature means something and I was able to do the right thing.


November 5th, 2009
4:09 pm

Noah…I’ve actually already went through that and closed escrow on my new home in July. Though process but we made it!! Think Ill qualify for the $6,500? (we meet income requirements)


November 5th, 2009
4:12 pm

Laker…You’ll have to read the bill but if you already closed I doubt it. I am sure it will be starting December 1st or there abouts.


November 5th, 2009
4:14 pm

Its not true you can walk away from your house and lose nothing but the house. If you have assets or a job the bank will eventually (but not for a long time) come after you legally for the difference between what you owed and what they sold it for.


November 5th, 2009
4:33 pm

Any chance it gets amedned?


November 5th, 2009
4:49 pm

What would it matter. You can’t get a jumbo mtg anyways..Motivate the banks to lend money.


November 5th, 2009
4:56 pm

I read the bill. It is an amendment,not a full bill. It adds some things to the original bill. One thing it states is that the date is changed to the new end date so the old date is stricken. Remember this is an amendment. It is short and sweet to the point. Here is the part about existing homeowners:

(b) Special Rule for Long-time Residents of Same Principal Residence- Subsection (c) of section 36 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

‘(6) EXCEPTION FOR LONG-TIME RESIDENTS OF SAME PRINCIPAL RESIDENCE- In the case of an individual (and, if married, such individual’s spouse) who has owned and used the same residence as such individual’s principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence, such individual shall be treated as a first-time homebuyer for purposes of this section with respect to the purchase of such subsequent residence.’.

Note that there is no mention of it being after December 1st to have to purchase. This bill is very short. I am reading all sorts of interpretations and can’t figure out what other people are reading. You can read it here


November 5th, 2009
4:57 pm

This is BS! i bought my house in 2005 while prices were INFLATED the most. Now you lock me out of trying to take advantage of something that might, just might inspire me to move into a bigger house. Which my family and business definitely need. Good job government, not one thing you’ve done during this recession has helped me in any way. You are giving out programs that help people that obviously have money to spend to begin with.



November 5th, 2009
4:58 pm

there should be lots of fraud cases this time.
Owner A can exchange with owner B their same model house, each will get $6500
how to track the 5 years is a big problem.
365 days a year exactly?
Some month have 30 days, some month have 31 days….


November 5th, 2009
4:59 pm


November 5th, 2009
5:09 pm

(e) Effective Date-

(1) IN GENERAL- Except as otherwise provided in this subsection, the amendments made by this section shall apply to purchases after the date of the enactment of this Act.

(2) DOCUMENTATION REQUIREMENT- The amendments made by subsection (b) shall apply to returns for taxable years ending after the date of the enactment of this Act.

(3) TREATMENT AS MATHEMATICAL AND CLERICAL ERRORS- The amendments made by subsection (d) shall apply to returns for taxable years ending on or after April 9, 2008.


November 5th, 2009
5:15 pm

This Effective date tells me this: The effective date of the act is the date is is signed. Which should be tomorrow. Does everyone else read it the same?


November 5th, 2009
8:11 pm

Ok, so I am confused by this. I sold my condo in May and bought a home in June. I am to assume that I don’t qualify for the $6500.00 and this will not be made retro? I thinking so, oh well I still got a great interest rate, a good price on a wonderful home……………..but a tax credit would be icing on the cake.


November 5th, 2009
8:46 pm

We owned a home for just over 5 years, sold it and now have been renting for 10 months. Do we qualify? I realize it states current homeowners, but then I also continue to see over and over again, you must have resided in the home for 5 of the last 8 years, so does that include me?

michael Jay

November 5th, 2009
9:57 pm

My wife and I bought a house this past April but we didn’t qualify for the $8000 credit since we made over $175000. Does anyone know if the new limit of $225000 is back dated or is it from now on?

Roger H

November 5th, 2009
10:28 pm

My question is the same as others… We sold/purchased homes in January of this year but were not eligible for the tax credit due to it being a 1st Time home buyer. I’ve asked my realtor to get an answer regarding whether the new guidelines approved and waiting for the President’s signature is retroactive…. Sure would be nice… as others have stated. But, this is the government’s plan…it will probably be effective when signed through April of 2010… We stimulated the economy without qualifying for the original tax credit.

By the way… Who is responsible for answering all of these questions???

Roger H

November 5th, 2009
10:36 pm

I read Rex’s 459 p.m. comments which provided a Link to the bill. Section 11 has numerous sub sections which address the issue of effective date for buyers who have owned their homes 5 years of the past 8 years…
Looks like it does go retroactive to the date of the Original Bill. Hopefully we will see a clarification in the news release tomorrow


November 5th, 2009
11:13 pm

The extension for first-time buyers is nice. I’m ready to buy, but of course I have a job and still make all my payments on time and so on, but I have a car loan and apparently that debt -which have always been current on- is too much, even though it’s less than 15% of my income and will be paid off pretty soon.

So I guess I keep on paying more in rent ($1000/mo) than a better house would be if I had a mortgage payment (looking at 700 for a MUCH nicer place). Shrug.