How does it work? When will it be available?
First things first: The new credit is available now. It took effect Nov. 6, the day President Obama signed the legislation. This means that if you fit the key criteria — you’ve owned and resided in your current home for a consecutive five out of the past eight years, and your adjusted household income doesn’t exceed $125,000 if you file taxes singly, $225,000 if you are married filing jointly — you can claim the credit as soon as you close on a qualifying home.
That could be next week, next month or next spring. There is no actual move-up requirement in the new credit. In fact, homeowners who plan to downsize may prove to be significant users of the credit, along with people who are relocating because of employment changes.
If you fit the criteria and are considering buying another home sometime in the coming year, you might want to speed up the process and sign a contract by April 30 and close by the June 30 expiration date. Think of it this way: If the government is willing to give you $6,500 to act a little faster than you had originally planned, hey, why not?