Group wants homebuyers to use new tax credit

Prospective homebuyers are pondering whether prices have hit rock bottom, so the housing industry is trying to create a sense of urgency.

How? By touting the new $7,500 refundable tax credit contained in the massive housing-stimulus bill President Bush signed last month. The credit expires July 1.

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John Spink / jspink@ajc.com

Georgia US Senator, Johnny Isakson speaks to a group of housing builders, sellers, real estate agents and politicians gathered Wednesday in front of the Georgia State Capitol in downtown Atlanta.

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Realtors, builders and lenders wearing “Buy Now!” stickers gathered on the Capitol steps Wednesday at a rally to promote the incentive. Beazer Homes, the beleaguered Atlanta-based homebuilder, held an online seminar last week to do the same thing.

“You will never see a better opportunity than the opportunity before us right now,” U.S. Sen. Johnny Isakson said, standing before an umbrella-toting crowd.

Isakson said he was selling homes — or trying to sell homes — in Cobb County in 1974 when the federal government passed a similar credit to help the market.

That credit worked and the new one should too, Roger Tutterow, the Mercer University economist, said.

“This is the kind of stimulus package that will jump-start the middle-income market,” Tutterow said after addressing the crowd.

Sales of new, single-family detached houses in metro Atlanta were down 45 percent the first half of the year compared to the same period last year, according to SmartNumbers, the local real estate research company. Resales were 41 percent lower, the company said.

The tax credit is really an interest-free loan that must be paid back in 15 years in equal installments. A recipient of $7,500 would pay $500 a year.

It’s available only to buyers who have not owned a home in the past three years and meet income limits. Singles earning less than $75,000 and couples earning less than $150,000 could qualify for the full credit.

Partial credits are available to individuals who earn between $75,000 and $95,000 and couples who earn between $150,000 and $170,000. The credit will be subtracted from taxes due or added to a refund.

Another change that could add to the sense of home-buying urgency is the expiration of down payment assistance Oct. 1.

Sellers have been able to assist buyers by channeling down payment money through charities. But a large percentage of those who received that help lost their homes.

Some banks are reeling because of loans that went bad due to lax lending and mortgage fraud.