Buy a home before May 1 and collect up to $6,500 from the government. If you’re a first-time homebuyer, get up to $8,000.

As part of the government’s efforts to encourage people to spend money to help revive the economy, the House voted 403-12 Thursday to expand a popular tax credit for homebuyers. The bill, which also extends unemployment benefits and expands a tax break for money-losing businesses, now goes to President Barack Obama, who plans to sign it Friday.

First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package. But with that housing program scheduled to expire at the end of November, the House voted to extend it into the spring — and to expand it to many people who already own homes.

Buyers who have owned their current homes at least five years would be eligible, subject to income limits, for tax credits of up to $6,500. First-time homebuyers — or people who haven’t owned homes in the previous three years — could get up to $8,000. To qualify, buyers have to sign purchase agreements before May 1 and close before July 1.

When the economy—and the real estate market—tumbled in 2008, the Fed stepped in to lower interest rates. As we have seen throughout history, lower interest rates makes housing more affordable, increase the likelihood of transactions, and ultimately produce stabilization in the residential real estate market. A major clue to where the residential real estate market is headed lies in the question of where interest rates might be headed.

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You and I aren’t the only ones doing the watching. If you see the 30-year mortgage rate start to climb relative to other interest rates, it’s a sure indication that your friendly neighborhood mortgage broker thinks a Fed rate hike is on its way—and that mortgages rates will climb.

So if you are thinking of buying or refinancing a home, this is a pretty good time to move, before rates begin to rise again.

The new rules were supposed to take effect Oct. 1. But the FHA has announced it would delay implementation of the new rules until Nov. 2, and says it might modify some of the policies.

Of the several new rules and requirements, there are four that most directly affect people who want to buy condos with FHA-insured mortgages:

• “Spot approvals” are eliminated, and now the entire condominium project has to meet FHA approval before a borrower can get an FHA-insured loan.

• A maximum of 30 percent of the units can have FHA-insured mortgages (there was no such limitation previously).

• Before the FHA will insure a mortgage on a condo, at least half the units must have already been sold (again, there was no such limitation previously).

• At least half of the project’s owners will have to occupy their units, down from 51 percent.

Here are some excerpts from the article:

If you thought home prices were bottoming out, you may be wrong. They’re expected to head a lot lower.

Home values are predicted to drop in 342 out of 381 markets during the next year, according to a new forecast of real estate prices.

Overall, the national median home price is predicted to drop 11.3% by June 30, 2010, according to Fiserv, a financial information and analysis firm. For the following year, the firm anticipates some stabilization with prices rising 3.6%.

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Hunter also sees a new wave of foreclosure problems coming from higher priced loans and prime mortgages. He expects a high failure rate for option ARM loans that were issued to prime customers so they could buy homes in bubble markets, such as California and Florida. In those areas, prices for even modest homes had skyrocketed.

The Obama administration is unveiling a new program to provide support to state and local housing agencies to provide help to thousands of home buyers and renters.

The administration said the new program would help to support low mortgage rates and expand resources for low and middle income borrowers who want to buy or rent a home.

The program will feature two parts — a new bond purchase program to support new lending by housing finance agencies and a temporary credit and liquidity program to improve access by housing agencies to credit sources for their existing bonds.

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The local and state housing finance agencies, which provide loans to people with low or moderate incomes, have had a hard time raising money to fund loans due to the housing crisis and credit crunch.

“This initiative is critical to helping working families maintain access to affordable rental housing and homeownership in tough economic times,” Treasury Secretary Timothy Geithner said. “Through this initiative, the administration aims to help (the housing finance agencies) jump-start new lending to borrowers who might not otherwise be served and to better support the financing costs of their current programs — key components in stabilizing the housing market overall.”

The head of the Federal Housing Administration warned that raising down payment requirements or taking similar steps to limit the pool of eligible buyers for FHA-backed loans would hamstring a fragile housing recovery.

“If it weren’t for this program, assuming that risk is being protected, this would forestall recovery of key metropolitan markets across the nation,” said David Stevens, the FHA commissioner, during a panel session at the Mortgage Bankers Association annual convention in San Diego on Monday.

Rep. Scott Garrett (R., N.J.) introduced a measure in Congress earlier this month that would require minimum down payments of 5%, up from 3.5%, on loans backed by the FHA. (See FHA Should’ve Done This Long Ago.)

Whatever the case, the FHA is the best program around for folks with less than 700 credit scores or less than 20% equity in their home.

Federal Reserve Chairman Ben Bernanke sent a fresh signal Thursday that he’s in no rush to reverse course and start boosting interest rates.

The Fed’s key bank lending rate is now at a record low near zero and will probably stay there for an “extended period,” Bernanke said in a speech to a Fed conference here.

That echoed the pledge he and his colleagues made at their meeting in late September. The goal: super-low rates will entice people and businesses to spend more, nurturing the budding recovery.

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Still, Bernanke made clear on Thursday that when the time is right the Fed will have the tools and the political will to reel in the unprecedented amount of money it has pumped into the economy to avoid unleashing inflation.

“At some point, however, as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road,” Bernanke said.