The first-time home  buyer credit has been in the news a lot lately — it’s expiring and lawmakers are trying to decide whether to renew the program.

Basically, the idea is to encourage more people to become homeowners by giving first-time homebuyers an $8,000 credit on their taxes.  That’s a pretty substantial tax credit for most homebuyers, so it is a big issue.  Proponents feel that continuing the program will maintain the current increase in home sales, whereas allowing the program to expire right now could cripple the  housing market’s recovery during a crucial time.

I think part of the issue here stems from paranoia about people who can’t afford to own homes qualifying for them anyway.  We’ve done a lot to prevent this from happening the same way again — the SAFE Mortgage Licensing Act, for instance, ensures that mortgage brokers are qualified to assist people in finding a loan — but many are afraid that we still haven’t done enough.

Personally, I don’t think there is any harm in continuing the program.  If someone can’t afford a house, theoretically they shouldn’t be able to get a loan these days, so whether they get a tax credit is a moot point.  But continuing the tax credit will help to attract those who can afford a home, which should be our ultimate goal here.

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