There is lots of Buzz about the Government extending the first time home buyer tax credit however nothing is set in stone and we are quickly approaching the November 30 deadline! We can hope they will extend this program since I believe it has had great results of stimulating the local market. Here is an article explaining the proposed plan:

Oct. 29 (Bloomberg) — The Obama administration endorsed a plan to extend an $8,000 tax credit for first-time homebuyers, saying it is helping stabilize the housing market.

The tax break, enacted early this year as part of the economic stimulus, has “brought new families into the housing market and contributed to three consecutive months of rising home prices nationwide,” Treasury Secretary Timothy Geithner said today in a statement.

Senate Democrats plan to extend and expand the credit, which expires at the end of next month, to include some people who already own residences. An agreement reached yesterday would let homeowners who buy a new home qualify for a $6,500 credit if they have lived in their prior residence for five years, according to Regan Lachapelle, an aide to Senate Majority Leader Harry Reid.

“The compromise we have now would expand the credit beyond first-time homebuyers,” Lachapelle said. Lawmakers expect to consider the measure as part of a bill to extend unemployment benefits, she said. That measure has been held up by a disagreement with Republicans over other proposed amendments.

Lawmakers have said they want to keep home sales from slipping as the economy struggles to recover from the worst drop in home prices since the Great Depression. The plan would extend the homebuyers’ credit to home purchases under contract by April 30, 2010, with borrowers allowed another 60 days to close the sale, according to a person familiar with the details of the agreement.

Up to $250,000

The credit would be available to individuals earning as much as $125,000, or $250,000 for couples, up from $75,000 for individuals and $150,000 for couples under the current law, Lachapelle said.

The amendment on the homebuyers’ credit is being packaged with a separate proposal to extend and expand a tax break for companies with net operating losses.

Any legislation would have to be reconciled with a House unemployment measure approved last month that omits the homebuyer tax provisions and extends jobless benefits only in states with the highest unemployment rates.

House Speaker Nancy Pelosi, a California Democrat, is waiting to see the final Senate agreement before deciding whether to support it, said spokesman Nadeam Elshami.

More than 1.2 million borrowers through Oct. 9 have claimed almost $8.5 billion of the $13.6 billion set aside for “first- time” homebuyer tax credits this year, according to U.S. Treasury data.

Stabilizing Sales

Realtors and mortgage bankers said the credits, which are available for taxpayers who haven’t owned a home in the past three years, have helped stabilize housing sales this year.

“Already we’ve seen the impact of this credit in jump- starting the housing sector,” Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, said on the Senate floor. He said it would be a “great mistake” to allow the break to lapse. Dodd estimated that more than 70 percent of current homebuyers would be eligible for the break.

While the tax credit speeds demand for homes from next year to this year, it won’t necessarily increase overall sales, said Scott Buchta, head of investment strategy at Guggenheim Securities LLC in Chicago.

“They do need to expand the credit to get more people involved, but at the end of the day you are paying people tax dollars to do what they probably would have done anyway,” Buchta said. “If it is passed, home sales of lower-priced homes should continue to hold their ground. However, if it is not passed we will probably see home sales slow down as we wait for natural demand to build up again.”

Significant Support

Reid, a Nevada Democrat, said on the Senate floor yesterday that there is significant support among both parties for the homebuyers’ tax credit. He said the other amendments sought by Republicans are unrelated to the unemployment bill and are designed to embarrass his colleagues.

Republicans want to vote on amendments on immigration and to bar funding for the community activist group Acorn.

Senate Minority Leader Mitch McConnell, a Kentucky Republican, agreed that most lawmakers support the unemployment and homebuyer measures. “We’re not that far away from an agreement,” he said yesterday.

The $2.4 billion unemployment measure would extend jobless benefits by 14 weeks in all states and provide an additional six weeks of benefits in states with the highest unemployment rates.

About 1.9 million Americans will exhaust their unemployment benefits by the end of this year unless Congress acts, the Labor Department said.

To contact the reporters on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.com; Brian Faler in Washington at bfaler@bloomberg.net