The credit, set to expire on November 30, is extended and liberalized and applies to qualifying purchases of qualifying principal residences before May 1, 2010. If there is a binding written contract to purchase on April 30, the buyer has until July 1 to close.
(1) The biggest change is that, in addition to first-time homebuyers, the credit will now be available to current homeowners who have owned and used the same residence for any 5 consecutive-year period during the 8 year period ending on the date of purchase of the subsequent residence. The credit limit for the purchase of the subsequent home may not exceed $6,500, the first-time homebuyer credit limit remains at $8,000. The eligibility of current homeowners for the credit applies to qualifying purchases after the enactment date.
(2) The phaseout limit is also liberalized. The new modified AGI-based phaseout begins at $125,000 for single taxpayers, and $225,000 for married filing joint taxpayers; the current phaseout limits begin at $75,000 and $150,000, respectively.
(3) The purchase price of the home must be $800,000 or less.
(4) Other changes favorable to certain military personnel are also included in the new legislation.
