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An expansion of the $8,000 first-time home buyer tax credit seems to be on its way after the Obama administration called upon the Congress to give house hunters more time to take advantage of the well-liked tax break. The move comes soon after Senate lawmakers reached an accord to not only push back the measure's threatening deadline but increase it to allow current homeowners and more well off buyers to claim the credit. "We welcome efforts taken by Congress to extend the first-time home buyers tax credit for a limited period," Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan said in a joint statement Last week. "This credit has brought new families into the housing market and contributed to three consecutive months of rising home prices nationwide. An Orlando mortgage consultant can help you take advantage of this proposed tax credit.

A tax credit of as much as $8,000 for qualified first-time home buyers was included in the Obama administration's comprehensive economic stimulus package. The measure was designed to stimulate demand for residential real estate and help soak up the outcropping of unsold homes that was putting downhill pressure on home prices. Combined with cheaper home prices and attractive mortgage rates, the perk has helped reduce the glut of unsold properties. Mark Zandi, the chief economist at Moody's Economy.com, expects the tax credit to result in as many as 400,000 additional home sales by the time of its scheduled expiration at the end of November. Trade groups—like the National Association of Home Builders and the National Association of Realtors—have been lobbying Congress to move the deadline back, arguing that failing to do so would endanger recent signs of stability in the housing market. The NAHB, for example, blamed last weeks weaker-than-expected new home sales report on the tax credit's impending expiration.

Although various proposals to extend and expand the credit have been disseminated in Congress for weeks, Senate lawmakers finally reached a deal in recent days. Under the terms of the agreement, the deadline for first-time home buyers to claim the $8,000 credit would be pushed back to April 30, 2010. But the term "deadline" doesn't mean the same thing as it does in the current credit. The Senate agreement requires that buyers must have a sales contract on a house by April 30 to be eligible, but it gives them an additional 60 days to close the purchase. That's much different from the current credit, in which sales must be closed by November 30. The new proposal extends the effective deadline of the credit to the end of June.