MBA Confident Home Tax Credit Will Be Continued

Washington, DC, Oct. 13, 2009--The Mortgage Bankers Association is growing increasingly confident that Congress will continue or expand the $8,000 tax for first time home buyers that is set to expire Nov. 30.

"We are pushing for expansion of the tax credit, and we are very close to winning this one," said David Kittle, MBA's outgoing chairman.

The tax credit has been credited with boosting home sales, and mortgage applications, as first-time buyers came out in force this summer.

"Hundreds of thousands of home buyers have come off the sidelines because of the credit, and if we lose it we risk losing the stability that is creeping backing into the housing market and the economy overall," said Robert Story Jr., a Seattle mortgage banker and the incoming chairman of the MBA, which opened its annual convention here Monday.

Political analyst Paul Begala, an adviser in the Clinton administration, predicted the credit would be extended, in part because of a feeling among a lot of the American people that they have gotten little out of the financial bailout that kept large institutions afloat.

It's not clear what form legislation to extend the tax credit would take; at least 20 bills have been drafted in Congress regarding the credit. Some proposals would not only extend the first-time-buyer credit into next year but would expand it to include all buyers, remove income restrictions and raise the maximum value of the credit as high as $15,000.

For those who purchase a home this year, the tax credit is for 10% of the purchase price, up to $8,000.