Norton Announces Extension of the Critical Stimulus Benefits for DC Most Needs (11/5/09)

Norton Announces Extension of the Critical Stimulus Benefits D.C. Most Needs

November 5, 2009

Congresswoman Eleanor Holmes Norton (D-DC), who cosponsored the $8,000 homebuyer tax credit extension bill and has also pressed strongly for extended unemployment benefits, today said she is gratified by the quick passage of H.R. 3548, the Worker, Homeownership, and Business Assistance Act of 2009, which is on its way to President Obama. The bill extends the unemployment compensation benefits to those hit hardest by the recession by up to 14 weeks, with an additional six weeks for states with unemployment over 8.5 percent, and extends and expands the federal $8,000 first-time homebuyer tax credit until the spring of 2010. Norton said that the bill is needed urgently in the District, which already has an unemployment rate of over 11 percent.

The $8,000 federal first-time homebuyer tax credit was modeled in large part on Norton's $5,000 homebuyer tax credit for District homebuyers, the only federal homebuyer tax credit in the country before Congress enacted the $8,000 credit. Norton's $5,000 D.C. homebuyer tax credit remains in effect until December, but the Congresswoman will work to extend it again as she has in the past. Attached is a chart illustrating the differences between Norton's $5,000 D.C. homebuyer tax credit and the $8,000 federal homebuyer tax credit. Residents can continue to check Norton's website, https://www.norton.house.gov/, to see a comparison of the two homebuyer tax credits.

Norton introduced her $5,000 D.C. homebuyer tax credit in the 1990s, during the city's severe economic crisis, and it has stabilized the outflow of taxpayers from the District. "Housing took the entire economy down and will almost surely be the last sector to recover," Norton said. "People are losing their homes because they have lost their jobs. Many others are reluctant to make purchases that place substantial personal financial burden on them when they know the economy will only recover slowly. The most important, and often the only, investment families have is in a home and, as a result, many have lost their life savings," she added. "Fortunately, the collapse of the economy has scared Americans into saving again and, with the help of the stimulus credit, Americans will understand that housing is still the best investment for qualified buyers." In the process, purchasers using the $8,000 federal homebuyer tax credit will simultaneously stimulate the housing market and the national and D.C. economies.

The extension and expansion of the $8,000 federal homebuyer tax credit increases the income eligibility phase out from $95,000 for individuals and $170,000 for joint filers to $125,000 for individuals and $225,000 for joint filers, and provides a $6,500 tax credit for current homeowners looking to buy a new home and who have been in their current residence for five or more consecutive years out of the last eight years.