The Frazzano Team

In a major victory for NAHB that will boost the fledgling housing recovery and help struggling business owners nationwide, Congress today approved legislation that will extend the first-time home buyer tax credit beyond its Nov. 30 deadline and expand it to a wider group of home buyers. The bill also provides relief to cash-strapped home builders by providing broader tax benefits for businesses with net operating losses (NOLs)

The legislation, which will be signed into law shortly by President Obama, will extend the $8,000 credit for first-time home buyers for sales contracts entered into by April 30, 2010 and closed by June 30. Further, it has been expanded to include a new $6,500 credit for owners of existing homes who are purchasing a new primary residence. An existing home owner can claim the $6,500 tax credit if they have been residing in their primary residence for five consecutive years out of the last eight.

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Nov. 2 (Bloomberg) — Legislation to extend unemployment benefits and a tax credit for first-time homebuyers cleared a procedural hurdle in the U.S. Senate as Democrats pushed to complete work on the measure this week.

Lawmakers voted 85-2 to move closer to a final vote on the bill, which would extend until April 30 the $8,000 homebuyer credit that otherwise would expire at the end of this month.

Senate Majority Leader Harry Reid, a Nevada Democrat, said last week he hoped both houses of Congress would pass the legislation by tomorrow.

That’s unlikely to happen if Senate Republicans, unhappy that Democrats are blocking their amendments to the plan, force the chamber through a series of procedural steps before the final vote.

In addition to extending the tax break for first-time homebuyers, the measure would let more people qualify for the credit, including some who already own homes and those with higher incomes.

Homebuyers who have lived in their prior residence for at least five years could receive a credit of $6,500. Couples earning as much as $225,000 a year and individuals earning up to $125,000 would qualify. That’s up from the current $75,000 limit for individuals and $150,000 for couples.

The tax credit was enacted as part of an economic stimulus plan in February. More than 1.2 million borrowers have claimed $8.5 billion of the $13.6 billion set aside for the homebuyer tax credits this year, according to the Treasury Department.

The Obama administration has endorsed the extension. The Joint Committee on Taxation estimated the revised homebuyer tax credit would cost $10.8 billion over 10 years.

The legislation also calls for spending $2.4 billion to extend unemployment benefits by 14 weeks in all states, and by six additional weeks in states with the highest jobless rates.

To contact the reporters on this story: Brian Faler in Washington at bfaler@bloomberg.net

Last Updated: November 2, 2009 17:40 EST

Good news to report: President Obama is expected to sign a resolution passed late yesterday by Congress extending the current limits for Fannie Mae, Freddie Mac, and FHA loans through 2010. The limits were set to expire at the end of this year. This is especially critical for California, where more than 80 percent of all loans are financed by Fannie Mae, Freddie Mac, or FHA, and will help maintain the positive signs we are now seeing in California

Rates for 30 year home loans have inched up, hitting 5 percent for the first time in nearly a month.  The average rate in up to 5 percent, up from 4.92 percent.  The record low of the of 4.78 percent hit in the spring.  Rates are still very attractive for many people looking to buy a home.  Last month, Fed Chairman Ben Bernanke and his colleagues agreed to slow down the pace of the program of the Feds buying mortgage backed securities, which has been keep interest rates artificially low.  The Fed has now agreed to wrap up the purchases by the end of next March.  It will be interesting to see what that does to the interest rates but I am pressed to say that rates will be heading back up.  

Homeowners in nine East Bay cities who sell or upgrade their properties starting in March must spend hundreds to thousands of dollars replacing their sewer lines under court orders obtained by the federal Environmental Protection Agency.  The orders are an attempt to stop the dumping of as much as 400 million gallons of partially treated sewage into the Bay each year as the result of overflows during rainy weather.  About 50 million gallons of partially treated sewage ended up in the Bay as recently as Oct. 13, when about 4 inches of rain fell on the East Bay.  Most of that was because of broken residential sewer lines that go from  homes to pipes in the street.  One court order, expected to be signed next month by all nine cities, requires the cities to strengthen existing laws or write new ones that require homeowners to fix or replace their lines when a home is sold or upgraded. It also will require those cities to fix their broken sewer collection systems.Â