House OKs extended homebuyer, jobless aid

Missed out on Cash for Clunkers? Congress has another deal for you: Buy a home before May 1 and collect up to $6,500 from the government. If you're a first-time homebuyer, get up to $8,000.

As part of efforts to encourage people to spend money to help revive the economy, the House voted yesterday to expand a popular tax credit for homebuyers.

The bill, which extends unemployment benefits and expands a tax break for money-losing businesses, now goes to President Barack Obama, who plans to sign it today.

First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the economic-stimulus package. But with that housing program scheduled to expire at the end of November, the House voted to extend it into the spring -- and to expand it to many people who already own homes.

Buyers who have owned their current homes at least five years would be eligible, subject to income limits, for tax credits of up to $6,500. First-time homebuyers -- or people who haven't owned homes in the previous three years -- could get up to $8,000.

To qualify, buyers have to sign purchase agreements before May 1 and close by July 1.

Laura Lafayette, CEO of the Richmond Association of Realtors, said the $8,000 credit already has proved successful in selling homes in the Richmond area. The $6,500 credit should do the same.

"This will make a difference . . . and stimulate homebuyers who have been siting on the fence," she said. "This credit gives folks that extra boost to go out and enter the market."

The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.

Real estate agents say the first-time homebuyers' tax credit that already is in effect has boosted sales.

Agents hope the expanded credit will help stabilize housing markets during typically slow winter sales months. Many would-be buyers are worried that values could drop more, said Lawrence Yun, chief economist at the National Association of Realtors.

About 1.4 million first-time homebuyers had qualified for the credit through August.

Also included in a bill was a provision to extend unemployment benefits for those without jobs for more than a year. The other tax break would allow money-losing companies to use current losses to offset taxable profits earned in the previous five years.

That break also would help industries that have suffered big losses in the recession, including retailers and homebuilders.