By Ryan Denham, The Pantagraph, Bloomington, Ill.

Oct. 29--BLOOMINGTON -- Brock Westbrook was about ready to give up on finding his first home last fall, frustrated after not finding the perfect fit and not too eager about being financially strapped afterward.

Then, Congress earlier this year passed an expansion of a tax credit for homebuyers, this time up to $8,000 and specifically for first-timers like Westbrook. It was just the nudge he needed to keep looking.

On May 15, he closed on his $125,000 single-story, three-bedroom home on Rowe Drive, near Ewing Park.

"It's great here. The neighbors are great. It's something I can call my own," said Westbrook, 23, an investment manager at a Bloomington bank.

The tax credit, which expires Nov. 30, has won the praise of buyers, banks, real estate agents and lawmakers, drawing comparisons to the popular Cash for Clunkers program for its stabilizing effect.

The IRS says 1.4 million buyers already qualified for the credit through August, and the National Association of Realtors estimates 350,000 sales -- including 9,100 in Illinois -- would not have taken place without it.

Just an unneeded subsidy?

Yet as Congress considers extending the credit or even expanding who's eligible, critics say many buyers would have entered the market anyway.

Locally, the impact is hard to quantify, though interest is high.

In the Twin Cities, where total home sales are down about 5.6 percent in 2009, resales from May to September 2009 -- prime time for the tax credit -- are up about 2.4 percent over 2008, according to the Bloomington-Normal Association of Realtors. And resales have accelerated as buyers rushed to close before the Nov. 30 deadline, with 195 resales last month compared to 163 in September 2008.

Randy Clark, vice president for mortgage lending at Busey Bank in Bloomington-Normal, said almost all of its recent first-time homebuyers who closed have used the credit. The first-timer market is about 15 to 20 percent of Busey's $100 million in annual loans, he said.

"It's made the market for houses under $200,000 quite robust," added local Commerce Bank President Bob Lakin.

John F. Collins with Coldwell Banker Heart of America said the credit goes hand-in-hand with good interest rates and lots of available houses.

"This is, for lack of a better term, a perfect storm," said Collins, also the new BNAR president.

What the credit really did was give real estate agents and mortgage officers something new to talk about, even though longstanding low interest rates are the real selling point right now, said Richard Kaplan, a professor of federal tax policy at the University of Illinois.

The credit may have led to more sales in 2009, but the long-term impact will be minimal, he said. He said any extension may have the reverse desired effect and that an expansion to existing homeowners somewhat negates a key benefit: the collateral purchases that come with buying a new home.

"When you start talking about extending it to existing homebuyers, who are you trying to fool?" Kaplan said. "How many congressional districts have homes in them? All of them. Who is going to be against this?"

For Westbrook, those collateral purchases included remodeling a bathroom. He got his $8,000 from the government within six weeks of amending his taxes.

Now, his mortgage and property taxes are still less than the $705 he was paying in rent.

"I gotta pay to live somewhere," he said.

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