Jul
01

Congress Approves Extension to Home Buyers Tax Credit

July 01, 2010

Worried you aren’t going to close on time to get your Home Buyer Federal Tax Credit? You aren’t the only one.

Congress has approved a plan that would give buyers an extra three months to close on their homes in order to qualify for the tax credit.

Senate Majority Leader Harry Reid, D-Nevada, introduced the measure, which would extend the closing date to September 30. Reid represents the state with the highest foreclosure rate.

In order to qualify for the Home Buyer Federal Tax Credit — $8,000 for first-time buyers and $6,500 for current owners — a signed contract had to be in place by April 30, and the sale was supposed to close by June 30.

The National Association of Realtors (NAR) has been pushing for an extension to that closing date, saying that lenders have been inundated with buyers trying to get approval for a mortgage and can’t get everyone set by the end of the month.

NAR says as many as one-third of qualified applicants have already been notified by their lenders that their mortgages will not close by June 30 simply because there are so many applications already in the pipeline.

Without the extension, as many as 180,000 home buyers could miss the deadline, even though they have done everything right.

Both the Senate and the House of Representatives approved the extension this week. Now the plan goes to President Obama for his signature.

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Tracey

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2 Comments

1

This is excellent news!
Backlogged, busy lenders are only one of the potential roadblocks facing homebuyers trying to close in time to qualify for the tax credit.
Because of the current state of the market, properties being sold via short sales and as foreclosures compose a good portion of the current “under contract” numbers. Banks have been notoriously slow in the short sale approval process (taking months and months) and the “red tape” surrounding foreclosures also takes some time to navigate. An extension of the closing deadline for this tax credit is a good thing and will give more of the buyers trying to deal with banks approving short sales and selling foreclosures a better chance at success.

2

[...] least we can’t attribute the Federal Home Buyer’s Tax Credit to the increase in home [...]

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