Home Buyer Tax Credit Has NOT been extended. 6/18/2010
Despite what you're hearing, the federal home buyer tax credit has not been extended beyond its June 30, 2010 deadline to September 2010. Congress is trying BUT it hasn't happended yet.
When the tax credit was last modified in November 2009, Congress modified its language to read that, in order to be eligible, a homeowner must be under mutual contract for a home on or before April 30, 2010, and must be closed on said home on or before June 30, 2010.
A surge in April purchase activity created back-office back logs at the nation's biggest banks and an estimated 180,000 home buyers are finding out the hard way that lenders don't always clear conditions as quickly as you'd like. 60 days between contract and close, industry lobbyists reasoned, would be ample time to execute. Turns out, they were wrong.
There's a lot of tax credit money at stake and Congress is trying to do something about it.
How A Tax Credit Extension Bill Becomes The Law
The tax credit date change is not its own bill. The extension proposal is tagged onto a broader bill of tax policy extensions and federal program renewals. This means that the fate of the home buyer credit won't be on the merit of the credit alone.
Under the amendment, they would get an extra three months to close -- useful for those who are experiencing delays in getting their mortgages approved or are somehow being affected by the many other issues that can arise and prevent a closing from occurring on time. The amendment would apply solely to buyers who entered a purchase contract by April 30.
It takes more than a Senate passage to extend the home buyer tax credit. It takes a vote in the House of Representatives plus a signature from the White House, too. So far, we're not there.
It's possible that the bill may not become law in time for June 30, 2010. The extension has passed the Senate but there's still two steps to go (and loads of debate). Stay tuned and I will let you know when it's a done deal!