Federal Home Buyer Tax Credit Extended and Improved! Will More SF Buyers Qualify?

The Federal Home Buyer Tax Credit has been extended and improved. This may mean that more San Francisco home buyers will qualify which is good news for both buyers and sellers.

Many clients have asked me what sort of impact the tax credit has had on our local SF real estate market. Given the income caps, I would have to say not too much of one. But now, this should be improved a little... I stress, a little, because the limitations continue to make the tax credit irrelevant for a large part of our market. For example, the limitation on the cost of a home is $800,000.

What are the major changes?

1. The timeline has been extended. You must go into contract on your home purchase before April 30, 2010 and close escrow by July 1, 2010.
2. Current homeowners now qualify. This is to help assist the "move-up" market. My readers know how great a time I believe it is to "trade-up" from your starter home into something more long-term (assuming you have relative job security and equity). ("Move-up" home buyers must have used their property as their "principal residence" for 5 out of the past 8 years.)
3. Income brackets to qualify have increased. Now, up to $125,000 for a single person and $225,000 for a married couple.
4. Purchase price limited to $800,000 or less.

For a complete 2009-NAR-Issue-Brief-Homebuyer-Tax-Credit-Changes-1104-1107.