Congress has extended the expansion of the $8,000 tax credit until next June 30 replacing the old deadline of November 30^th.

But here’s something in the expanded program that hasn’t gotten much attention: The new $6,500 federal tax credit for so-called “move up” buyers took effect immediately upon enactment.

That means that potentially hundreds of thousands of Americans who fit the key ownership and income criteria for the new credit are eligible for it … right now.

What are those tests?

• You have to have owned and used your current home as your principal residence for five consecutive years out the past eight.
• Your adjusted household annual income cannot exceed $125,000 if you file taxes as a single, or $225,000 if you are married filing jointly.
• You must sign a contract to purchase a replacement residence before next April 30, and go to closing on it by June 30, 2010.

Although the $6,500 feature has been labeled the “move up” credit, there is nothing in the law forcing anybody to buy a bigger or costlier house. You can downsize or upsize and still get the credit.

This new condition or, rather lack thereof, not only will stimulate more activity in the market but it just may help families choose the most appropriate price range for their families budget, which is better for everyone in the long run.

If you would like more information about how the tax credit can help you in your next home purchase email bill.swanson@cbshome.com.