Foster pushes for extension of homebuyer tax credit

If it wasn't for the $8,000 first-time homebuyer's tax credit, John Baldauf would have a new house with bare walls, no place to sit and an entertainment system far below the flat screen and surround sound he has now.

And without the favorable interest rates he received on his mortgage, Baldauf might not even have his new Aurora abode.

There's not much Congress can do about interest rates, but Congressman Bill Foster said Friday that extending the tax credit is necessary to fuel the economy and boost all the segments of the real estate industry. Foster, who spoke from Baldauf's new home, said the tax credit is a major reason why moderately-priced homes have seen an uptick in sales recently. Now is not the time to slam the door on that progress as was seen when the Cash for Clunkers program abruptly ended, Foster said.

"The fact is that some people who recently began the process, they will not close soon enough to receive the credit," Foster said. "We need to stick with what works."

Baldauf, an engineer, said the tax credit was the clinching factor for him in deciding if and when to buy a home.

"If the tax credit had not been there I probably would have chosen to remain in the apartment life for another one or two years," he said. "I was personally able to stimulate the economy. And that feels good."

Officials from both the Home Builders Association of Greater Fox Valley and the National Association of Realtors back the plan to extend the tax credit.

"This is one of the those stimulus packages that actually works," said John Hall, Jr., of the home builders association. "It should not only be extended; it should be improved upon."

The Realtors group said $63,000 is pumped into the economy for each new home that is purchased and closed on.

But not everyone is a fan of extending the tax credit. Mark Vargas, a Republican contender for Foster's Congressional seat, said Friday that the tax credit is just a "superfluous, temporary fix-it gimmick."

Vargas issued a statement saying job creation is the only thing that will truly help potential homebuyers.

"Rather than offer a temporary tax credit to a small percentage of qualifying residents, our economy would be better served by reducing the tax burden across the board to stimulate growth," Vargas wrote. "We must first increase employment by adopting an atmosphere that rewards strong business practices and encourages entrepreneurship."