More on the Home Buyer Tax Credit Deadline Extension

More details of the extended tax credit for first-time and move-up home buyers deadline that the Senate voted to extend to SEPTEMBER 30, 2010.

As part of its plan to stimulate the U.S. housing market, Congress last fall approved the Extended Home Buyer Tax Credit. This extended the deadline for the First-Time Home Buyer Tax Credit from Nov. 30, 2009, to April 30, 2010, and NOW potentially until SEPTEMBER 30, 2010. It was also expanded it to include repeat buyers.

Home buyers may get more time to claim tax credit
MarketWatch June 18, 2010
By Amy Hoak , Real Estate writer

For some people angling to claim the home-buyer tax credit, hiccups in getting to the closing table are threatening to disqualify them from getting the incentive. But a Senate amendment to the American Jobs and Closing Tax Loopholes Act of 2010 would give them more time to finalize the sale.

To qualify for the credit, buyers had to be under contract for a purchase by April 30. But under current law they have until June 30 to close on the sale.

Under the amendment, they would get an extra three months to close -- useful for those who are experiencing delays in getting their mortgages approved or are somehow being affected by the many other issues that can arise and prevent a closing from occurring on time. The amendment would apply solely to buyers who entered a purchase contract by April 30.

"Because of this program's popularity and the time it takes to complete transactions such as short sales, I led the effort today to extend the closing deadline for this tax credit through September of this year -- allowing lenders more time to clear a backlog of 180,000 potential home buyers nationwide," said Senate Majority Leader Harry Reid, in a news release after the amendment passed in the Senate this week.

Still, the measure is only one part of a wide-ranging jobs and tax bill that still needs to be voted on by both chambers of Congress before it would become law.

Many in the industry are concerned that some buyers won't make the current deadline, especially due to the extra time it takes to get a final mortgage approval these days, combined with the high volume of loan applications in process for purchase and refinance mortgages, due to low interest rates.

According to the National Association of Realtors, as many as one-third of qualified home buyers have been told by their lenders their mortgages won't close before June 30 because of the volume of applications being processed.

"These are not buyers who just entered into the market. These are buyers who previously met all the qualifications for the tax credit, but find themselves at the mercy of a work-flow jam with the lenders or other delays and might not be able to complete the purchase of their homes," said Vicki Cox Golder, NAR's president, in a news release. "Since these applications were already in the pipeline and figured into the program's cost, the extension of the closing deadline should not incur any further government costs."

For more information regarding this post or other real estate information contact Robert Dixon at RE/MAX Palos Verdes Realty (310) 703-1848 or email info@robertdixon.net. Content of this or any other post is presumed to be accurate but not guaranteed.