Can the First-Time Home Buyers Tax Credit Be Saved?

"Push to Extend Tax Credit"

Insiders Report:

If you are one of the many first time Los Angeles home buyers who have been in a frenzy to find a home before the $8,000 tax credit expires there is new information you need to be aware of.

Many real estate lobbying groups are pushing hard to have the program extended for first-time buyers.

Its understandable that this program would gain a lot of support from those looking to have the program go beyond the 12-01-09 deadline.

Even with the big push...you have to wonder what the realistic chances of extending the tax credit for buyers looking at Los Angeles, Ca homes for sale?

Given the programs impact on the economy through homes sales, it figures to get strong consideration.

According to economists at the National Association of Realtors, anywhere from 300,000 to 350,000 additional sales of houses will be stimulated this year by the credit.

What would that do the ailing California economy?

Its estimated that each home sale generates approximately $63,000 in downstream "ripple effects" elsewhere in the economy, which includes sales of furnishings, appliances, lawn mowers, landscaping, renovation materials, plus moving expenses.

A new Los Angeles home mortgage... combined with a tax housing credit... provides a powerful, and immediate stimulus bang for the buck.

It appears that Congress may be getting the message.

Bills already are pending in both houses to extend the credit for another year for those looking to use the credit for with Los Angeles home loans for purchase.

Senate Majority Leader Harry M. Reid, D-Nev., whose state has been among the worst hit by the housing bust, reportedly now favors an extension of the credit.

He was quoted to that effect by the Las Vegas Sun on Aug. 5, adding, "It's something we can get done."

But can any of this happen before the Nov. 30 deadline?

The key complicating factor is Congress' heavy load of higher-profile, pressing issues that will get attention before anything else in September and October.

This would include health care reform, climate change and energy, financial system regulatory reform and a new Consumer Financial Protection Agency, among others.

One of the main arguments against extending the tax credit is the effect it would have on the federal deficit.

With budgets already drowning in red ink, can Washington really afford to give up billions in lost revenue?

Given the overall political economics of the housing credit, the odds probably favor some sort of extension... and probably later rather than sooner given the congressional back log.

Some legislators are pushing for a bigger credit and broadening the program to cover all home purchases next year...but don't count on that.

Realistically, the best scenario first-time home buyers can expect is an extension of the current program.

If that happens...get ready to take the credit and run... because it doesn't figure to be available indefinitely.

Los Angeles Home Mortgage Specialist

Albert Arouh
Purchase Mortgage Specialist
City 1st Mortgage Bank