Will Homebuyer Tax Credit Extension/Expansion Help Mississippi Homebuyers?

“Man, the tax credit, I don’t know if we’d be where we’re at right now if it wasn’t for that.” Justine Cobb

Federal tax credits for first time home buyers and current home owners could increase sales in Mississippi. MPB's Lawayne Childrey reports.

Justine Cobb and his wife spent 6 months searching for the perfect home in Pearl.

“We were almost in the point of tears. There’s no way we could afford any of the houses, we looked everywhere.”

Finally they heard about the $8,000 dollar tax credit for first home buyers.

“Man, the tax credit, I don’t know if we’d be where we’re at right now if it wasn’t for that.”

Not only did the tax credit help them to qualify for their first home it also help them avoid some additional debt.

“We put a thousand in savings and took seven thousand and got her a vehicle that we can trust for years to come. And so ah, really if it wasn’t for that it would have delayed us a long time getting a house cause we would have had to take care of the car first.”

The federal tax credit for first time home buyers has been so successful that congress recently extended the qualifying deadline from November of this year to April of 2010. Michael Booker, President of Bancorp South in Clinton says the extension is good for the overall economy.

“So it should help to bring prices back and obviously as people buy those homes at that level, then hopefully we will have people that will trade up also. So as time goes on it should be a continued plus if you will for the economy.”

Also included in the legislation is a $6,500 dollar move up credit for current homeowners. Margaret Byrd is President Elect of the Mississippi Mortgage Brokers Association.

“But it really is not that they have to move up in home. It’s actually called a move up or repeat homebuyer. And basically the law defines a tax credit qualified move up homebuyer as a homeowner who has owned and resigned in a home for at least five consecutive years of the eight previous years prior to the purchase date.”

Officials say for some buyers the new $6,500 dollar credit could be used to offset losses from selling their existing homes that may have dropped in value in the past two years. For MPB News, I'm Lawayne Childrey.