Home Buyer Tax Credit Deadline Extended?

Last week the Senate amended a bill to give homebuyers who were under contract to purchase a home or condo by April 30^th an additional 3 months to close on the deal and still claim the federal homebuyer tax credit (up to $8,000 back from the federal government.) The extension of the current June 30^th deadline to September 30^th would allow lenders more time to clear out the backlog of 180,000 homebuyers nationwide who have been waiting on financing to complete their home purchases. This will also greatly benefit those buyers who are currently under contract to purchase short sale or foreclosure properties. Bank delays have been a consistent challenge in the purchase of distressed homes so the extension will give these buyers a few more days to breathe easy and wait for those final bank signatures and POA’s.

The House passed an earlier version of this bill in December, which the Senate amended and approved in March. The House and Senate must still resolve differences between the versions before the bill can be signed into law. The National Association of Realtors has supported the amendment- citing Realtor reports that as many as 1/3 of qualified buyers have been told by their lenders that their loans will not be able to close before the initial June 30^th deadline simply due to the sheer volume of loan applications in the pipeline.

What does all of this mean for you? If you are not currently under contract (and the contract was executed before April 30^th) this does not change much for you. The extension of the actual tax credit benefit is not even a part of this recent amendment to HR 4213 the “American Jobs and Closing Tax Loopholes Act of 2010.” Although this should help new buyers who are the in the financing line behind all the tax credit buyers as some of the pressure is briefly lifted in the lending world. It’s really your local lender that is breathing a sigh of relief, as they faced masses of angry clients, sellers and agents that were all counting down the days to June 30^th.   They may be able to reset the clocks for 90 more days to close and allow clients to still claim their $8,000.

If you missed the $8000 tax credit and are searching in DC, you may be in luck!  Washington DC has a $5000 tax credit for buyers purchasing in DC in 2010. This tax break phases out as income rises between $70,000 and $90,000 on single returns and between $110,000 and $130,000 on joint returns.  The DC credit reduces the buyer's federal taxes.

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