WASHINGTON (CNN) - Two U.S. senators on Thursday confirmed a bipartisan deal intended to extend the first-time homebuyers' tax credit that was originally passed earlier this year as part of the economic stimulus bill.
Democratic Sen. Christopher Dodd of Connecticut and Republican Sen. Johnny Isakson of Georgia told a news conference the plan would help the U.S. housing market at a time of decreased home values that have contributed to the economic recession.
The original credit in the stimulus bill is set to expire at the end of November and offers a tax credit of $8,000 to first-time homebuyers.
Under the agreement announced by Dodd and Isakson, proposed legislation that must pass both chambers of Congress and then be signed by President Barack Obama would extend that $8,000 credit for first-time buyers until the end of next April. In addition, the measure would add a separate $6,500 credit for some current homeowners who buy a new residence by then.
To qualify, current homeowners must have lived in their primary residence for five continuous years. The deal also would increase the maximum income for participants from $75,000 for an individual and $150,000 for a couple to $125,000 for an individual and $225,000 for a couple.
Isakson said the bill would cost $10.2 billion and generate a $10.5 billion payoff to the U.S. Treasury for a net gain of almost $300 million. He emphasized the tax credits would end next year, so Americans must act now to benefit from them.
"Tax credits like this only work by creating the sense of urgency to take advantage of them and to bring the market back," Isakson said. "So the American people and the potential homebuyers of the United States, and home-sellers, for that matter, have an opportunity, in the next seven months, to take advantage of a once-in-a-lifetime credit, and help us bring the housing market back to some sense of vitality."
Dodd said extending and expanding the homebuyers' credit would "make a difference to so many middle-income families." He said most people rely on home equity for their wealth, and noted 15 million U.S. homes had mortgages exceeding their value with thousands of foreclosures occurring every day.
"This isn't the only answer, obviously," Dodd said of renewing the confidence of consumers, "but I think at a time when that's been lagging and sagging, this can help."
Senators have not agreed on how the tentative deal would come up for a vote, but sources from both parties said they are considering adding the housing credit to a bill that would extend unemployment benefits.
On the House side, Speaker Nancy Pelosi has indicated she also is interested in extending the homeowner credit, but House leaders have yet to endorse any one bill.
why not the government got lots of money.....
Big deal. What they need to do is fix the existing mortgage mess and revise the "rules" for loan modification so that more homeowners can save their homes.
Why don't they come up with a program where if your house is not insulated very well you can trade it in to a builder who bulldozes it and gives you $100,000 off a new energy-efficient house? Bucks for Bungalows?
I thought the republicans said the stimuls bill asn't working, why are they now voting to extend it...
we may be making it barely financially, but we are neglecting everything else – church, community, our children's education – just to pay our bills
being financially responsible is costing our country's soul
Yippee! My family now qualifies for the $6,500 credit . I'll be out looking for a new home this winter.
Did they figure out a way to keep children under 10 from getting the credit??
Big government at it's best.
Hey I'm not going to argue, I made the cut (for the first time in 45 years of being alive) to finally purchase a home. I'll take all the help I can get thank you. I've had a full time job and paid the highest (single) taxes for 30 years now with little to show for it other than keeping everyone else's grandma on Medicare or a sister on social security or preserving the national forests.. Thanks to both Senators for a helping shot in the arm. Raise taxes to pay for government programs and services? Who would have thought? Actual Revenue? What a concept! Oh wait, we didn't include the 3 trillion for the Iraq war!
Look at the critics. Partisan hacks, through and through. Here's a policy that actually CUTS taxes and you knot heads from the right are against it.
Borrowers need to take responsibility, if they applied for a loan they could not afford then they should face the consequences...
About time the Dems got up and called the LIARS for what they are. In the past, they just sat back and took it, as if to stand up for the truth wasn't the nice thing to do.
Forget nice. They don't play nice. Set the record straight. Call out the pharisees for who they are.
Meanwhile Republicans and Teabaggers complain about taxation - ignoring the fact that Dems have been cutting taxes and extending credits all year long.
Heck, most of these people protesting against the Recovery Act don't even realize they got a big tax cut from it!
stand up and call them out for who they are.
I'm SO GREATFUL to have such a HARD WORKING President making a differnce in the lives of the AVERAGE AMERICAN.
Someone please explain how decreased home values have contributed to the economic recession. If I'm living in my home why should I care what value someone else sets on it? If the prices are depressed the houses should sell easier. Besides, the buying frenzy of the past shot house prices thru the roof, and now they are falling back to where they should be anyway.
The tax break that GA Senator Isakson is so proud of has helped to raise the house prices again, meaning even with the tax break the buyers will pay the money back through higher mortgages.
More tax dollars wasted again.
The housing problem was not started by irresponsible borrowers
It was not the government nor the borrowers, bundled subprime and prime mortgages together and then sliced them into derivatives and them on a closed market.
The government and borrowers did not set up this house of cards, that came falling down when NO ONE could LOCATE the individuals that were defaulting on a specific mortgage. If the industry had been able to locate and isolate the bad loans as a whole entity, none of the mortgage debacle would have happened.
The government and the borrowers did not come up with credit swaps to sell as insurance against loss in the derivatives market.
That was completely the work of big business "wizards" and the deregulations per Phil Gramm 1circa 1999
And just yesterday it was reported that this program is rife with bogus claims, including quite a few from government employees. So of course Congress wants to extend it. After all, we can never have too much corruption.
I agree with what the government is doing in helping people stay in their home or buy a home because we have to save the overall economy, "but"
OTOH, it irks me that I have to bail out people who live in a house much better than mine because they bought a home they couldn't afford.
Plus, now we are giving a tax credit for people to buy a home, which means I am also paying for that. Where was the government when we bought a home and one that we could afford? Nowhere to be found!
All you bailed out homeowners need to realize you have to be able to afford the payments so next time buy something that fits your budget! Lenders will tell you that you can afford a home you can't because they get paid a commission on every loan. Next time figure out a budget to see if you can afford the home including a fund for the unexpected so you don't have to use your equity to buy new cars so you can "look" like you can afford to live better than the rest of us.
Geez, when will they quit throwing our money away on all these worthless programs? Wheres the program and give away to all of who were responsible and pay our mortgage on time, don't have credit card debt and pay all our taxes? Oh yeah, our reward will be even more taxes out the tax and spend bunch. I got a buck, they want more than half of it. When does it end?
I guess its better then the govt. squaring away the bankers again. So what do I get for doing the right thing and paying on time ... oh thats right i get the shaft....... and the gop wants to extend this part of the stimulus package? they better check with rush and glen beck.. and just for the heck of it... check and see who is nailin palin.oopps i mean check with nailin palin..not who's nailin palin .. after all she has lead the way with this program in alaska ... hasn't she?
Hopefully this can get young first time home-buyers, and those looking for that dream home...
...in a buying mood...
...slowly but surely the President's plans are bearing fruit...
...the country's GDP grew at @ 3.5%...
...that's GREAT news...
...and the Wall Street mafia (and Rick "Sanctimonious" Santelli) are CRYING!!!!
what about all the people who took advantage of the $7,500 tax credit last year. they keep giving everyone else money when we have to pay that back over.
And dodd and barney were in charge of the fannie and freddie fiasco that started this mess to start with? that's scary.
And who pays for all this? I already know the answer, but i just have to ask it hoping by some miracle, you idiot liberals will contemplate it.