By Kevin Randall

Kevin Randall, a sophomore at the University of Notre Dame, has signed on as a guest columnist for Finding Benjamin. If you’re unfamiliar with the first-time home buyer tax credit, check out Chris’s story all about his own home buying experience!

What are you waiting for?  If you’re a prospective first-time homeowner, buy that house you’ve been eyeing up NOW.  Although Congress has been debating extending the first-time home buyer’s tax credit beyond its current December 1^st end date, a recent report by the inspector general makes that extension seem less likely.

Federal reports released last Thursday have pointed out rampant fraud in the beloved tax credit program, costing hundreds of millions. Treasury Inspector General for Tax Administration J. Russell George said his office has located at least $500 million in fraudulent claims – claims made by “first time home buyers” who were not in fact first time home buyers.  Another 19,000 fraudulent taxpayers claimed the credit on homes that they had not even purchased.

Most interesting, the report also listed more than 500 cases in which the home buyer was not yet 18.  One first time home buyer was 4 years old – apparently he’d had enough of his crib and opted for his own bachelor pad.

Humorous anecdotes aside, the staggering reports of fraud combined with the heavy cost will likely discourage an extension of the program past December 1^st.  To date, 1.4 million tax returns taking advantage of the first time home buyer credit have been filed, costing upwards of $10 billion.

Senate Majority Leader Harry Reid supports extending the program, but the cost is prohibitive.  Simply extending the current program would cost about $1 billion each month, but another proposal is even more expensive.  Some lawmakers want to extend the program to all home buyers – even toddlers – as well as double the maximum possible credit to a cool $16,000.  This could potentially cost $2.4 billion each month, a huge amount considering many economists believe most potential home buyers would still purchase homes even without a tax credit.

The moral of the story?  Make sure you’re eligible for the tax credit… and hurry up.  Head over to the National Association of Home Builders to see if you’re eligible and also how many bones Uncle Sam will toss your way for your first home purchase (most home buyers receive less than $8,000).  After doing some homework, begin your search, but keep in mind you will probably only have until December to take advantage of the tax credit.