Mortgage lenders see help from tax credit.(Mortgage Lending)

MORTGAGE LENDERS AROUND the state agree that the $8,000 tax credit for first-time homebuyers is making a difference, although it will be a couple more months before they know just how much.

It's an integral part of the Obama administration's plan to turn around the real estate industry and encourage home ownership.

And it's happening at the best of times for the mortgage lenders--coming alongside the lowest mortgage interest rates in more than 50 years as well as housing prices that have declined, even substantially in some markets.

Those ingredients have been the incentive for many who now rent to look into buying a home. And that is good news for mortgage lenders and for the economy.

Although the tax credit, part of the American Recovery & Reinvestment Act of 2009, was passed by Congress in February, it has taken some time for mortgage lenders and real estate firms to market the advantages it offers. Now that the word is getting out, lenders say they're getting more questions from possible beneficiaries.

The act offers the credit, equal to 10 percent of the home's purchase price up to a maximum of $8,000, to first-time homebuyers buying either a new home or resale on or after Jan. 1, 2009, and no later than Nov. 30.

The buyer must not have owned a principal residence during the past three years.

The income limit for single taxpayers is $75,000; the limit is $150,000 for married taxpayers filing a joint return. The tax credit amount is phased out for buyers with higher modified adjusted gross income and zeroes out at $95,000 (single) or $170,000 (married).

By John Henry

jhenry@abpg.com