Good news for millions of prospective home buyers who weren’t able to seal the deal on a new home in 2009 – the $8,000 first time homebuyer’s tax credit has been extended. Then again, if you’re a first time homebuyer, you probably already knew that.

President Obama signed the bill on Friday, which includes two key changes to last year’s tax credit bill, including:

• An increase in the earning limit for eligible couples to $225,000 (a $55,000 increase over the existing bill)
• A $6,500 tax credit for current homeowners available to those who have lived in their current residence for at least five years

The extension expires on April 30, 2010, with the stipulation that buyers must have a sales contract by that date and must close on the home within 60 days. First time homebuyers who have already started the process and are due to close on a home after the current credit expires on November 30 will still be eligible for the new credit.

Overall, the tax credit seems to be working, and is predicted to spur even more housing sales now that it’s been expanded to current homeowners. Under the existing credit, the National Association of Realtors reported that sales were up 9.4 percent in September 2009 (5.57 million units), a 9.2 percent increase over September 2008.

Good news for those who haven’t been able to take advantage of the $8,000 first time homebuyer’s tax credit: There’s a chance it could be extended.

The deadline for the current tax credit is November 30, putting it out of reach for most people who haven’t started the process, but the tax credit has been very popular (1.4 million homebuyers and counting). And, as is typically the case with popular government initiatives, there’s a movement within the House and Senate to extend the program through 2010. That’s good news for would-be buyers and even better news for builders and real estate agents (who, not surprisingly, represent the majority of voices in support of an extension).

You might think that a successful tax credit program would result in an increase in housing sales, which would decrease the chances of the program being necessary in 2010, and you’d be right. Housing sales have been on the rise, but sales dropped 2.7 percent in August (the first decline since March) and housing prices have dropped more than 12 percent, which takes us back to the potential for a tax credit extension.

We’ve heard various versions of an extension are currently being considered in our nation’s capital – a total of six bills in the House and Senate – including one that would extend the program for military members who were stationed overseas in 2009 (likely to gain approval), one that would extend the $8,000 credit for all home buyers (not just first-timers), and one that would extend the credit and raise it to $15,000 (a suggestion by Senator Johnny Isakson of Georgia, who happens to be a former real estate broker). The $15K Isakson idea isn’t the long shot you might think it is. Isakson’s bill was narrowly defeated in a 47-50 vote in August, but may make a comeback thanks to its 16 co-sponsors.

Detractors claim an extended tax credit would be too costly for an already strapped government budget, but proponents say new house sales pump much needed capital back into the economy as new homeowners buy furniture, appliances and other new home necessities.

Said tax credit supporter and National Association of Home Buyers President Jerry Howard in a CNNMoney.com article: “When I bought my first home, I begged, borrowed and, since the statute of limitations is now over, I can admit I stole from my parents to furnish it.”

If you’re a prospective first-time homeowner who wants to take advantage of the government’s $8,000 tax credit, we should remind you that time is running out.

Many people assume they have until the end of the calendar year to make their purchase, but the deadline for the free money is actually November 30. That means you’ve got a little more than two-and-a-half months to close on the house of your dreams (and yes, that includes new modular homes).

Whether or not you can choose a design and close on a new modular home within that timeframe is debatable, but if you’re looking at existing homes, you’d better get on the ball. Due to recent changes in the mortgage industry, it can take several weeks or months for some lenders to wrap up the entire process. If you have any questions about the timing of your efforts and the likelihood of qualifying for the tax credit, contact your local lender or real estate agent. You do already have a real estate agent, don’t you?

Great news for those of you considering the purchase of your first home, though many of you may already be aware of it. Under the “American Recovery and Reinvestment Act of 2009,” an economic stimulus package designed to revitalize the housing market, all first-time home buyers who purchase or build a house in 2009 year will receive an $8,000 tax credit. Unlike the similar 2008 tax credit, this credit does not need to be repaid.

The good news is, there really aren’t that many catches to the plan. The credit covers 10 percent of the home’s value, up to a maximum of $8,000. In other words, if you purchased a home worth $65,000, you’d receive a tax credit of $6,500. To qualify for the credit, you must make less than $75,000 a year if you’re single, and less than $150,000 for married couples.

As defined by the tax credit website, a “first-time home buyer” is anyone “who has not owned a principal residence during the three-year period prior to the purchase.” So if you owned a home four years ago, but have rented since then, you qualify as a first-time home buyer!

Feel free to check out the tax credit website and the “frequently asked questions” page for more info about this deal and a similar credit for those of you who bought or built a modular home in 2008.