Tax Credit Buyers May Get an Extra Three Months to Close
About 200,000 home buyers can step back and take a breath.
The Senate last week voted to push back the closing deadline for first-time buyers hoping to capitalize on the landmark $8,000 tax credit. Originally, buyers had to ink a purchase agreement by April 30 and close on the home by June 30 in order to qualify for the credit. Now, an amendment to a major piece of employment legislation would give buyers an extra three months to close — the new, extended deadline is Sept. 30.
The measure was sponsored by Sen. Harry Reid, D-Nevada, whose home state has been the epicenter of the foreclosure crisis. More than 180,000 home buyers were in jeopardy of missing the initial June 30 deadline, according to estimates from the National Association of Realtors. The bill must now be approved by the House and signed by the president before taking effect.
The deadline extension also applies to the program’s counterpart, a $6,500 tax credit for existing home buyers.
However, it does not appear to have any bearing on the other major extension already in place — that’s the one for active-duty military who were serving outside the U.S. while the tax credit was in place. Those who served at least 90 days on extended duty have until April 30, 2011, to purchase and until June 30, 2011, to close. There are exceptions for service members who fell short of the 90-day mark because of medical issues.
Military members must also meet the tax credit program’s basic criteria. Qualified borrowers can combine the savings and buying power of a VA loan with the tax credit to create a tremendous one-two punch.