Question:  Existing homeowner credit: Must the new house cost more

than the old house?

No. Thus, for example, individuals who move from a high cost area to

a lower cost area who meet all eligibility requirements will qualify for the

 $6500 credit.

Question:I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?

Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

Question:I am a first-time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the

time I go to settlement, will I be eligible for a credit?

Yes. The new income limitations go into effect as soon as the President

has signed the bill. The income limit and other eligibility rules will look to

your status as of the date of purchase, which is the settlement date. So if

the new rules have been signed when you go to settlement,you should be

eligible for the credit (or a portion of the credit if you're within the phase

out range).

Question: I am an eligible existing homeowner. I have a fair

amount of equity in my home. I have found a home with a non-

negotiable price of $825,000. Will I be able to use any

of the $6500 tax credit?

No. The $800,000 cap on the cost of the purchased home is firm at

$800,000. Any amount above $800,000 makes the home ineligible for

any portion of the credit. The $800,000 is an absolute ceiling.

Question:I owned my home for 10 years, but sold it two years ago 

and have been renting since. If I purchase a home, will I be eligible

for the  $6500 tax credit if I meet all the other eligibility tests?

Yes. Because you lived in the home for more than 5 consecutive years of

the previous 8, you will qualify for the $6500 credit. For example, say

John and his wife bought a home in 2000 and lived there until 2008 when

he got a divorce. Whether John has been renting or bought in

the interim, he WOULD INDEED be eligible for the credit because he

owned a home and occupied it as his principal residence for 5 consecutive

 years out of the last 8 years. The keyword here is "consecutive." As long

 as he lived in that house for 5 years straight what he did since 3 years

 doesn't impact eligibility.

Question: I am an eligible first-time homebuyer. I entered into a

contract  to purchase on November 1, 2009. Do I have to go to

closing before December 1? How does the extension date affect me?

You do not have to close before December 1. Once the legislation has

been signed, it will be as if the Nov 30 date had never existed. Therefore,

so long as the contract settles before April 30(or July 1, worst case), the

purchaser will be eligible for the credit.