Homebuyer Tax Credit Extended

In a race against an impending deadline, new homebuyer Jennifer Medeiros was able to close escrow just in time to qualify for an $8,000 tax credit.

Medeiros, 23 and a probation officer, just made it by the June 30, 2010 deadline.  According to the National Association of Realtors, up to 200,000 homebuyers were not as lucky.

Fortunately for them, the deadline to close on their purchase recently was extended to Sept. 30, 2010.  The extension is for the federal tax credit program for first-time buyers, $8,000; and existing homebuyers, $6,500.

“Sonny (mortgage consultant Nguyen of Century 21 Mortgage) took care of it for me,” said Medeiros. “He said I had to be in escrow by April 30 and close by June 30.”

Nguyen said he not only took care of Medeiros, but his office made the tight deadline for every homebuyer seeking the tax credit.

“We cranked them all out,” said Nguyen. “All the people we committed to, we got them out by the June 30 deadline.”

While the closing deadline has been extended, no new homebuyers are being excepted as the federal tax credit program requirement for signed purchase agreements has long passed the April 30 deadline.

Contrary to rumors those funds for California’s twin $100 million tax credit programs for new and first-time homebuyers, respectively, have been exhausted, the program is still accepting applications.  Qualified homebuyers are eligible for a $10,000 tax credit.

According to the state Franchise Tax Board, as of July 6, only 57 percent of the first-time homebuyer tax credit had been requested.  For the latest information of the California tax credits go to the web at: http://www.ftb.ca.gov/individuals/new_home_credit.shtml

Erik Immel, a Century 21 M&M Realtor in Fairfield, is not a fan of tax credit incentives.

“Everyone that qualified, used it, but that wasn’t the reason they bought the house,” said Immel.  “We need the economy to turnaround and we need jobs.”

Immel, who covers Solano and Napa counties, said the region has been hit hard by job losses.

“My next door neighbor is the City Manager of Fairfield,” he said. “He’s had to layoff over 250 employees in the last 1-1/2 years.”

Linda Lewis, a Century 21 M&M Realtor in Madera, concurs unemployment has greatly impacted realty sales and also adds a low inventory of houses for sale as a factor.

“We have a very low inventory supply right now,” said Lewis.  “Just because the foreclosure process is taking so long.”

However, Lewis does believe tax credit incentives do work and have helped homebuyers lacking enough money to make a down payment.

“Relatives and friends can gift them $8,000 toward the down payment, knowing they will get it back,” she said.

“I definitely feel we need another incentive. An additional incentive would simulate the market,” said Lewis. “I’d like to see a $5,000 tax credit that would go directly to closing costs.  That would also benefits the banks.”

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