New Home Buyer tax credit proposal could strenghten housing market

GOP Plan Aims to Expand Home Buyer Tax Credits

By Renae Merle

Washington Post Staff Writer

Wednesday, March 25, 2009;

House Republican leaders plan to unveil a housing package today that would increase the tax credits available for home buyers and would direct law enforcement to crack down on mortgage fraud.

Under the proposal, borrowers refinancing their mortgage would be eligible for $5,000 to help cover closing costs or to reduce their principal balance. The plan also revives a $15,000 home buyer tax credit proposal that Republicans pushed last year. This time, the proposal would require the borrower to have at least a 5 percent down payment.

Both programs would expire in July 2010.

 “We want to make sure responsible homeowners are able to purchase homes and stay in their homes,” said House Minority Whip Eric Cantor (R-Va.), who will introduce the legislation. “If you can get a $15,000 tax credit, that is a tremendous incentive to get qualified buyers back into the game.”

Currently the home buyer tax credit is 8,000 if you purchase a home before 12/31/2009