Senate Approves Extended Homebuyer Tax Credit

The Senate has approved a $15,000 homebuyer tax credit that the homebuilders and Realtors have been pushing for to stimulate sales and soak up the excess inventory of unsold houses. The Senate approved and added the tax credit amendment by Sen. Johnny Isakson, R-Ga., to the economic stimulus bill by a voice vote. The Isakson amendment expands an existing $7,500 homebuyer tax credit to $15,000, or 10% of the purchase price, whichever is less. And it makes the tax credit available to all homebuyers. The House has passed a $7,500 tax credit that is limited to first-time homebuyers. In the 1970's, the government successfully employed homebuyer tax credits to get the economy out of a serious housing down turn, according to Sen. Isakson. "We have a pervasive housing problem, and we have a historical precedent that works. I am proud this Senate has joined together, learned from history and repeated a method that worked by adopting this amendment," he said. Sen. Patty Murray, D-Wash., is expected to offer an amendment that raises the maximum loan limit on Fannie Mae, Freddie Mac and FHA loans back to $729,750 for the rest of this calendar year. The House-passed economic stimulus bill has a similar loan limit provision.