My post on the likelihood of the first-time home buyer credit continuing past its scheduled sunset date of Nov. 30 got a lot of reader attention and prompted one big question.
How much of an extension can we expect?
I'll get to that query momentarily, but first if you'll indulge me, I'd like to lay a little background and foundation.
The first-time home buyer credit was improved -- and actually made a credit, not an interest-free federal loan -- in the American Recovery and Reinvestment Act that became law on Feb. 17.
On Feb. 23, Rep. Lincoln Davis (D-Tenn.) introduced H.R. 1119 to "expand the application fo the home buyer credit."
The bills to retain, expand, make permanent, whatever haven't stopped since. In addition to H.R. 1119, we have in the House:
H.R. 1245 (Ken Calvert, R-Calif.)
H.R. 1344 (Sue Wilkins Myrick, R-N.C.)
H.R. 1453 (Lee Terry, R-Neb.)
H.R. 1767 (Ron Paul, R-Texas)
H.R. 1805 (Zach Wamp, R-Tenn.)
H.R. 1993 (Joe Courtney, D-Conn.)
H.R. 2606 (Eddie Bernice Johnson, D-Texas)
H.R. 2619 (Kenny Marchant, R-Texas)
H.R. 2655 (Dan Burton, R-Ind.)
H.R. 2801 (Howard Coble, R-N.C.)
H.R. 2905 (Jerry Moran, R-Kan.)
H.R. 3761 (Judy Biggert, R-Ill.)
H.R. 3773 (Donna Edwards, D-Md.)
H.R. 3801 (Joe Sestak, D-Penn.)
A few others bills had been introduced before the February stimulus bill change, so I didn't include them. And to be honest,
I also left out those that dealt with changes to the credit as it affects members of the military. As I blogged in House OKs military home buyer credit, the House has passed a measure to extend this tax benefit through Nov. 30, 2010, to our service personnel.
But wait, there's more: Over on the Senate side of Capitol Hill, we have the much ballyhooed measure by Georgia Republican Sen. Johnny Isakson, to expand the home buying credit to anyone, not just first-timers, and extend that break through June 30, 2010.
Since I discounted some House bills that were introduced before the credit's changes in February, I must note that Isakson's measure also was dropped in the hopper back on Jan. 15. But he's doing such a fine job of pushing it out there for public consumption, that I had to note it here.
Other Senate bills to extend and/or expand the credit come from Maryland Democrat Ben Cardin's S. 1678, also introduced in January; and S. 1728 from Missouri Democrat Claire McCaskill's S. 1728, which could modify the credit for Armed Forces home buyers.
What's going to happen? As you might expect, the modification proposals are as various as the Congressmen and Congresswomen who introduced them.
I really wish I had a better crystal ball. The one I do have long ago gave out on me and is being used as a bookend.
So my next few statements are going to be strictly guesses.
Since the House already approved a measure to extend the first-time home buyer credit to members of the military through Nov. 30, 2010, that date is a definite possibility.
Isakson's bill would continue an expanded credit through June 30, 2010.
And many of the proposals are calling for the credit to be available, either for first-timers or all home buyers, until the end of next year.
Survey says: But y'all asked, so I'm going to creep just a few inches out onto a legislative limb and say I expect a six-month extension. That would get us through next May. By then, we'll have a better idea of how much the housing industry is improving.
Plus, paying for six additional months of credits wouldn't cost as much.
Numbers crunched by the National Association of Home Builders, which supports keeping the credit going for another year, indicate that a 12-month extension and making it available to all buyers, except for investors and vacation-home purchasers, cost $30 billion for that one year.
Yikes! Even with an election on the horizon, or maybe because of that impending midterm vote, that's an awful lot of possible red ink on the Treasury's books.
So I'm sticking with a six-month extension and saying it will continue for first-time home buyers only.
Of course, I could be totally off the mark. And that's why when the hubby and I go to Las Vegas, I stay out of casinos!