The Senate has agreed to extend the $8,000 first-time homebuyer tax credit originally set to expire Nov. 30. The bill next moves to the House of Representatives, which strongly supports the extension. The Obama administration also has signaled its strong support for an extension of the tax credit.

Aside from the first-time homebuyer credit, the new plan would offer a $6,500 credit for repeat or move-up homebuyers who have lived in their primary residence for five years or more. The tax credits would be available to buyers who sign purchase agreements on a new or existing primary residence between Dec. 1 and April 30, 2010. Buyers would have until June 30 to close on their new homes.

There is an $800,000 price limit on all homes eligible for the credit. The income limits for all buyers would rise to $125,000 per year for individuals and $225,000 for married couples. Under the current program, the limits are $75,000 and $150,000, respectively.

The first-time homebuyer credit is also available to those who haven’t owned a home in the previous three years. The credit does not have to be repaid unless the home is sold or ceases to be the primary residence within three years.

According to the Treasury Department, more than 1.2 million borrowers have claimed $8.5 billion of the $13.6 billion set aside for the first-time homebuyer tax credit.

Be advised that the legislation has not yet passed, but I will keep you informed as it moves through Congress.

— Craig Greene is a senior loan officer at Prospect Mortgage, 3916 State St., Suite 100, Santa Barbara 93105. He can be reached at craig.greene@prospectmtg.com or 805.898.4211.