Thinking about buying a first home this year but haven't quite made up your mind?
President Bush has a proposal designed to lure people like you off the sidelines and into a mortgage.
It's a $5,000 tax credit for first-time home buyers. If Congress approves, it would work something like this:
People who haven't owned a home for at least three years would qualify for the credit if they buy a house between Feb. 1 and Dec. 31, 1992.
Contracts for homes signed by Dec. 31 would count, too, as long as the sale is closed by June 30, 1993.
Mr. Bush proposed the one-time credit in his recent State of the Union Address, as one element of his economic stimulus plan.
The credit would be equal to 10 percent of the value of the home, up to $5,000, and buyers could claim half in 1993 and half in 1994.
"It's $5,000 off your taxes," said John MacDougall, a personal financial planner at IDS Financial Services. "It's $5,000 you don't have to pay, so it's a pretty good deal."
But will it motivate people to buy?
Buyers already in the market were clearly cheered -- but not necessarily swayed -- by Bush's announcement Jan. 28. And at least one home builder isn't waiting to find out.
Kennedy Homes in Pompano Beach is promising discounts to make good on the credit for its first-time buyers in Broward and Palm Beach counties, even if Congress does not approve the measure.
Warren Abelson, vice president of sales at Kennedy Homes, said he feared that the Bush proposal would drive some buyers to the bleachers.
"The whole thing that is scaring me is that when you have something hanging out there, people take a wait-and-see attitude," Mr. Abelson said. "I don't want this to be a detriment."
Still, many buyers are unclear on what the credit would mean.
The U.S. Treasury Department moved last week to clear up some of that confusion by releasing additional details on the Bush plan.
For instance, Treasury officials now say buyers who qualify for the credit but can't use it because their tax bill is too low can carry the credit forward into the next tax year, for up to five years.
Still, some questions remain, including whether builders will be able to use the credit to help first-time buyers who lack money for a down payment.
Some fear the credit may not pack as much wallop as backers hope, because it doesn't address that fundamental problem.
Michael Carliner, an economist with the National Association of Home Builders, said the trade group is counting on builders to find a way to make the credit count up front, when the sale closes.
"We hope this credit can be somehow converted to a down payment," he said.
That happened in 1975 when a similar credit was offered, Mr. Carliner said. But builders may find they have less leeway today, he said.
"Lenders have gotten much more restrictive in the things they will allow the builders to do to help the buyers," he said.