-First-time homebuyers (defined as buyers who have not owned a home in the last three years) are eligible for a tax credit of up to $8,000. New to the package is an incentive for existing homeowners who’ve been at their current residence for at least five years. They will now be eligible for a credit of up to $6,500.

-The income limit has been increased. Previously, a single taxpayer could not have a modified adjusted gross income (MAGI) above $75,000 to claim the full credit, and up to $90,000 for a partial credit. Those limits have been raised considerably to $125,00 and $145,000, respectively. In addition, married couples can now qualify with a MAGI of between $225,000 and $245,000.

-Eligibility for the new program is for homes purchased after Nov. 6, 2009 and before May 1, 2010. However, home purchases subject to a binding sales contract by April 30, 2010 will still qualify provided that the closing occurs prior to July 1, 2010.

Proponents are hopeful that the extension will help the real estate market continue its recent surge in momentum. Moody’s estimates that the program will have helped trigger an additional 400,000 sales from its inception in February 2009 through the end of November. If you have any questions regarding the new tax credit, please feel free to contact me.