Congress Extends Housing Credit Closing Date

In support of the housing market and pending deals nationwide, the House and Senate have pushed through a three-month closing extension for the homebuyer tax credit.

On Friday July 2nd, President Barack Obama this morning signed HR 5623, the “Homebuyers Assistance and Improvement Act of 2010,” a three-month extension on the closing deadline for first-time home buyers to receive the tax credit.

Potential homeowners with offers currently under contract now have until September 30 to close the deal, instead of the original June 30 deadline.  The tax credit remains at a maximum of $8,000.A copy of the HR 5623 can be downloaded here.

The bill is worded to retroactively include properties that closed in the first two days of July.

According to the Internal Revenue Service, besides providing a tax benefit to first-time homebuyers and purchasers who haven’t owned homes in recent years, the law also allows a long-time resident of the same primary home to claim the credit if they purchase a new principal residence. To qualify, eligible taxpayers must show that they lived in their old homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home.

* 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 complete their purchases

* These tax credits include $8,000 for first time homebuyers and $6,500 credit for others purchasing a new primary residence

This is a strong measure to assist the housing market, as the disappearance of these incentives (or buyers running out of time) have contributed to a recent fall in home sales.

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