Last month I wrote about how many people were in danger of being left out in the cold with their first time homebuyer or current owner homebuyer tax credits. Because of the large number of homes being purchased, and the slow pace that many banks were taking on homes being bought that were short sales and foreclosures, many people who would have otherwise qualified were in real danger of missing out on the tax credit.
Homebuyer Tax Credit Extended
A week or so ago the President signed into law H.R.5623 – Homebuyer Assistance and Improvement Act of 2010. What this law has done is effectively extend the closing deadline for those who were already under contract by the original tax credit contract deadline of April 30th. They will now have until September 30th to close on the purchase of their home (instead of June 30th).
The U.S. Congress has approved a bill extending the closing deadline for homebuyers trying to take advantage of a popular tax credit. Homebuyers with contracts signed by April 30 who failed to go to closing by the June 30 deadline will now have until September 30 to finish the purchases. The House of Representatives approved the bill Tuesday, Congress approved it Wednesday, and it now goes to President Barack Obama for his signature.
The $8,000 tax credit for first-time homebuyers and $6,500 credit for others purchasing a new primary residence was a highly popular temporary measure by the Obama administration to jump start home sales during the economic recession.
Real estate agents said thousands of homebuyers would miss the June 30 deadline because banks and settlement offices were struggling to deal with the volume of people rushing to close on their deals.
“In addition to helping thousands of families experience the American dream, this successful and popular program provides a much needed boost to Nevada’s housing market and economy,” Senate Majority Leader Harry Reid said in a statement.
Reid, a Democrat, faces a tough re-election fight in Nevada, where the U.S. foreclosure crisis is most pronounced.
The Senate acted separately on the tax credit extension after another bill that included both the homebuyers measure and an extension of jobless benefits for the long-term unemployed was blocked by Republicans.
The jobless aid bill fell one vote short of the 60 needed to overcome procedural hurdles in the 100-member Senate. Republicans objected to the $34 billion cost of the bill.
I know the passage of this bill will make a lot of people happy, many who commented on my previous posts. For many of them they played by the rules, bought a house only because of the tax credit fully expecting to have enough time to close. When the banks didn’t respond fast enough, they could have been left out in the cold. Now, they’ll have a second chance at getting the deal done.
What do you think of the tax credit extension for those already under contract? Will it help you to receive your tax credit? Do you think it is just a further waste of taxpayer money? Tell us your thoughts in the comments.