Not only are lawmakers trying to extend the $8,000 federal tax credit for first time home buyers, but they are seeking to expand it too. As the market slightly improves, the tax credit’s role in supporting in the economy may be more significant that initially perceived.

The Senate is proposing that the credit be amended to include those that are not just first time home buyers, but people that need the assistance too. The scope of the program would cost an additional $16.7 million according to estimates by congressional analysts.

As there is already pending bill in existence that is aimed at helping people hit by the recession, Senators Johnny Isakson (R-Ga.) and Christopher Dodd (D-Conn.) are proposing to combine the two bills into one.
Even though the White House has urged that a second stimulus package will not be provided, the extension of this federal tax credit is one of the main issues being backed by Congress to aid those in need get though this recession.

The federal tax credit has been extremely popular as it allows first time home buyers to reduce their federal income taxes by 10 percent of the price of a home, up to a maximum of $8,000. The credit is currently set to expire on November 30, 2009.

The Isakson-Dodd proposal is requesting to extend the credit until June 30, 2010. In addition, it would open the opportunity up to those who are not just first time home buyers and raise the income eligibility to $150,000 or $300,000 for a couple.