With the House expected to vote this week on housing stimulus package H.R. 3221, included as a centerpiece of the housing bill is a temporary $8,000 first-time home buyer tax credit for the purchase of any home. The tax credit would spur home sales, eliminate excess inventory, relieve downward pressure on house prices and bring otherwise qualified home buyers back into the market.

An extension of the expiration date is being pushed by some sectors particularly the homebuilders beyond the set date which is April 1 next year.

In order to maximize the stimulative effect of the home buyer tax credit on the housing market and the U.S. economy, the group of homebuilders is urging lawmakers to extend the credit expiration date into the spring and summer home buying season.

As the legislation now stands, the tax credit could be used for homes purchased between April 9, 2008 and April 1, 2009. Since Congress has taken so long to pass the housing bill and is not expected to finalize the bill until later this month, home buyers in effect would lose four months of being able to use the credit unless this provision is modified.

H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act, contains several other provisions of interest to home builders. The bill would:

• Modernize the FHA and permanently raise its loan limits
• Give states authority to issue $11 billion in mortgage revenue bonds
• Reform the GSEs and permanently increase the conforming loan limit to help buyers in high-cost markets
• Enhance the Low Income Housing Tax Credit
• Provide foreclosure relief that could help as many as 400,000 struggling home owners
• Provide tax relief for home owners who don’t itemize their deductions