House Passes Extension to Home Buyer Tax Credit

The last day to close on your home purchase in order to qualify for the Home Buyer Tax Credit (Congress Extends/Expands Home Buyer Tax Credit) is tomorrow, June 30, 2010. Many people who had a signed contract on or before April 30, 2010 may not be able to meet that deadline. The National Association of Realtors (NAR) estimates as many as 180,000 people will lose that tax credit due to delays in their closings.

In recent years, with lenders tightening their lending standards and increased regulations, many real estate purchase transaction are taking longer than they had in the past. Many people in the industry were worried whether two months from the contract deadline (April 30) to the closing deadline (June 30 was long enough. In addition to the tighter standards and regulation, the increase in volume has made closing on a home an even longer process.

The House of Representatives passed a two-month extension to the closing deadline today with a 409-5 vote. The extension only applies to those home buyers that met the contract deadline of April 30. The Senate must now pass a similar bill which is already in the works.

The home buyer tax credits are credited with helping to stabilize the slumping housing market across the country. According to the NAR, over 1 million home purchases would not have occurred if it were not for the home buyer tax credits. The IRS states that over 2.6 million home buyers had claimed the credit by April 2010 for a total of $18.7 Billion in tax credits