Home buyer tax credit extended and expanded

This is good news for investors. Hopefully it will continue to push new buyers into the market.

Congress has extended the first-time home buyer tax credit (up to $8,000 for qualified buyers) to April 30, 2010, and expanded the credit to move-up buyers. Current homeowners who have lived in their homes five out of the past eight years are eligible for up to $6,500 tax credit on a new or existing home purchased between November 7, 2009 and April 30, 2010.

The tax credits come with some eligibility requirements:

1. Homes purchased must be $800,000 or less.

2. Move-up homebuyers must have occupied the home they are selling as their primary residence consecutively for five of the previous eight years, or forfeit the tax credit.

3. Only single buyers with incomes up to $125,000 and married couples with combined incomes up to $225,000 are eligible.

4. FHA, Fannie Mae and Freddie Mac conforming loan standards apply. The tax credit does not substitute for a down payment, but it can be used to supplement a down payment or pay down closing costs.

5. Only U.S. Citizens who file tax returns are eligible.

If a homebuyer has a written binding contract on or before April 30, 2010, and is unable to close before the deadline, the Extended Home Buyer Tax Credit allows until June 30, 2010 to close.