The tax credit will be extended through April 30, 2010, with a 6-day extension if a binding contract is in place prior to the deadline. First-time home buyers will continue to receive a tax credit of up to $8,000, while existing homeowners will receive a credit of up to $6,500.

CNN Money – Propelled by the first-time home buyer’s tax credit, nearly half of home sales now are being made by first-time purchasers, according to an industry report released Friday.

Wall Street Journal – During the housing boom, critics increasingly complained that the government devoted too many resources to homeownership and too few to more affordable options, such as renting.  Now, during the bust, the government’s commitment to ownership has grown even larger, according to a new report from the Congressional Budget Office.

San Jose Mercury News - Just one in 20 Americans say they plan to buy a home within the next year, and they’re most likely going to be 34 years old or younger and living in the South or West, according to a new survey.

The percentage of households that could afford to buy an entry-level home in California stood at 64 percent in the third quarter of 2009, compared with 55 percent for the same period a year ago, according to a report released last week by C.A.R.  The Index is the most fundamental measure of housing well-being for first-time buyers in the state.

The minimum household income needed to purchase an entry-level home at $247,150 in California in the third quarter of 2009 was $43,500, based on an adjustable interest rate of 4.79 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $1,450 for the third quarter of 2009.

At 85 percent, the High Desert region was the most affordable area in the state. The San Luis Obispo County region was the least affordable in the state at 47 percent, followed by the San Francisco Bay region at 49 percent.

An index comparing similarly sized 2,200 square foot, four-bedroom, two-and-a-half bathroom homes in college markets revealed that in addition to the economic stability associated with higher education, homes in these areas also are affordable.  The Coldwell Banker College Home Price Comparison Index (HPCI) revealed that home buyers can find a typical four-bedroom home for less than $250,000 in 62 percent of the 72 college markets surveyed.

According to the report, empty nesters and families are attracted to these markets because of the health care systems, culture, and overall quality of life offered in college towns.

Fannie Mae last week announced a new Deed for Lease™ program. Deed for Lease allows borrowers to transfer their property back to the lender and then lease back the house at market rate. The lease period is for up to 12 months, with possible month-to-month contract extensions after that period. The program is designed for borrowers who do not qualify for or have not been able to obtain other loan-workout solutions, such as a loan modification.

To participate in the program, borrowers must live in the home as their primary residence and must be released from any subordinate liens on the property. Tenants of borrowers in this circumstance also may be eligible for leases under the program. Borrowers or tenants interested in a lease must be able to document that the new market rental rate is no more than 31 percent of their gross income.

There are lots of questions as to who qualifies for the extended tax credit. The website
www.federalhousingtaxcredit.com has some of the best information.

- Janis Stone – DRE# 00517072

Senator Chris Dodd, D-CT, has been negotiating for several weeks with Senator Johnny Isakson, R-GA., to craft an extended tax credit for homebuyers that would pass the Senate. Last Wednesday, they announced agreement on a bill that would extend the tax credit for first-time homebuyers and offer a reduced credit of $6,500 to repeat buyers who have owned their current homes for at least five years.

The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November. The Commerce Department said last Wednesday that new home sales fell 3.6 percent in September, and some industry representatives blamed uncertainty about the tax credit.

The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers.

If the full Senate passes the bill, it would go to the House, which passed a similar bill extending unemployment benefits last month. House leaders have also said they support extending the tax credit for homebuyers.

It takes 45 to 60 days to close on a house, making it unlikely a sale made today would be consummated by the end of November, unless the tax credit is extended.

About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of REALTORS® estimates that 350,000 of them would not have purchased their homes without the credit.

A survey of first-time home buyers conducted by the California Association of REALTORS® shows that 40 percent would not have purchased a home without the tax credit. In tandem with organized real estate’s efforts to extend the current loan limits, both CAR and NAR are vigorously working to have the soon-to-expire federal First Time Home Buyer Tax Credit extended, and in that regard the assistance of every REALTOR® is needed.

Sometime today, please find time to contact your congressional representative today (Nancy Pelosi for San Francisco, Jackie Speier for the peninsula). In the Senate, an amendment offered by Senators Dodd, Lieberman, and Isakson will both extend the program into 2010 and expand the eligibility requirements. The amendment has been attached to a bill that will extend unemployment insurance benefits. It is expected that the bill will pass the Senate and then be voted on by the House of Representatives. It is critically important that every REALTOR® member of the San Francisco Association of REALTORS® contact either Nancy Pelosi or Jackie Speier to urge them to support the unemployment extension bill that contains the home buyer tax credit. Please respond to the National association of REALTORS® Call for Action http://takeaction.realtoractioncenter.com/campaign/hbtc?qp_source=actionsplash. Working together, REALTORS® can make a difference in Washington, D.C.

First-time home buyers can easily become overwhelmed with the various loan choices available.  Experts recommend first-time home buyers apply for a loan with an interest rate fixed for the duration of time the buyer plans to live in the home. Hybrid loans may be an option worth considering, as they are fixed for a certain period and later change to an adjustable-rate mortgage.  This may be a viable option for a buyer planning to stay in the home for just a few years.  However, most buyers should consider a 30-year fixed-rate loan.