$7,500 tax credit may be yours forever!

Who couldn't use an extra $7,500? In an effort to spur potential home buyers into the market, Congress passed a bill for a first-time home buyer tax credit. In short, here's how it currently works: If you haven't owned a home in the last three years, meet certain income restrictions and buy a house between April 8th, 2008 and July 1st, 2009...you can apply for the tax credit of up to $7,500. This amount minus any taxes you owe Uncle Sam is yours on either your 2008 or 2009 refund (depending on when you buy). The catch is that you must pay it back with 0% interest over 15 years. Not bad...but nothing to get excited about.

The latest stimulus package that President Obama is attempting to push through Congress has a few minor tweaks to the tax credit that result in some major changes. Nothing is official but here is a simplified version of the changes: you don't have to pay the $7,500 back! Ever! Now that's a reason to jump of the fence if I've ever heard one. The National Association of Realtors is lobbying to push the July 1st deadline back to December 31st of 2009 which would give buyers more than a couple months to close after the bill passes next month (assuming it does!).

So with houses on sale in nearly every market; interest rates at historic lows and Uncle Sam giving you $7,500...what reason would you have not to buy your first house?

Seattle Times article discussing proposed changes to tax credit.