Prices are at record low levels yet firming up, interest rates remain attractive and home loans slowly are becoming more available for first-time and repeat buyers alike.

Fearing that those were not enough incentives to keep the economic recovery on track, Congress recently extended the existing $8,000 tax credit for first-time buyers until April 30 with a settlement date of June 30. Congress also decided to offer a $6,500 tax credit to existing owners with the same deadlines.

If buying a home is even remotely on the radar screen, the tax incentives are additional reasons to get moving.
Both are available now and can be claimed on any binding contract signed as of Nov. 6 or after. That was the date President Obama signed the legislation into law.

Here are the key criteria for anyone interested in claiming the $6,500 tax credit available to existing home owners:

• The buyer has owned and lived in a home for a consecutive five out of the last eight years.
• The adjusted household income does not exceed $125,000 for a single tax payer or $225,000 for a married couple filing jointly.
• The credit can be claimed immediately.
• There is no “move-up” requirement, which means home owners who plan to downsize to a smaller, less expensive dwelling could be major beneficiaries of this tax credit.
• The house cannot cost more than $800,000.
• The replacement house must be the buyer’s primary residence.
• There is no requirement that the cur-rent home be sold first — or at all — before moving into the replacement home. That means the original home could be rented, used it as a second home, or the owner could simply delay selling until sometime in the future in the hope of capturing a higher resale price. For buyers who can swing it, that ought to be a major reason to start house hunting.
• The credit is not limited to single-family homes. Like the first-time buyer tax credit, existing owners can buy a variety of different dwelling types: new or existing single-family homes, condominiums, manufactured or mobile homes and even boats, so long at they serve a the principal residence. The excluded categories include a second home and investment property.
• Because fraud pops up where ever tax dollars go, be ready for added scrutiny by the IRS. Congress ordered the Internal Revenue Service to check more closely any tax return claiming either the $8,000 or $6,500 tax credit. Disallowed transactions include those among immediate family members and individuals under the age of 18 who are counted as dependents on another taxpayer’s filing. Tax payers are required to submit copies of the settlement statements — HUD-1 forms — along with a request for the credit using IRS Form 5405.
• Taxpayers who close escrow no later than Dec. 31 can claim the $6,500 credit on their 2009 federal tax returns or amend their 2008 returns. Eligible buyers in 2010 can file for the credit on their 2009 returns or 2010 returns. Consult a tax advisor about how to maximize the benefit of the tax credit.

Will the $8,000 and $6,500 credit be extended beyond April 30, 2010? Don’t count on it.
In fact, the word out of D.C. is that the primary authors say absolutely, positively that there will be no more extensions beyond next year.
Actually, let’s hope that that is the case, as it will mean the economy is back on track, which would be the best news for everyone.