Home Tax Credit Extension Dies (for now) on Senate Floor…

Do you have a transaction that qualified for the home tax credit?


Today’s action by the senate killed a large stimulus bill which included business tax breaks, renewal of the flood insurance program and an extension of unemployment benefits. Also attached to the bill was an extension of the deadline for the home tax credit. Real estate transactions that had been in contract before April 30th have a current deadline of June 30th, the extension would give buyers until September 30th to complete the transaction.

Senate Majority Leader Harry Reid who is one of the bills biggest backers feels that the extension may survive through being attached to another bill that has a better chance of approval. Should the bill not survive as many as 180,000 transactions that have yet to close and are in danger of not qualifying for the rebate. Many of those who will not meet the deadline are tied up in a short sale transaction, which are notorious for their lengthy closings.

The failure of the bill may impact many who were counting on the credit to offset their closing costs or down payment. Those buyers could look to the seller to help offset the lose, though it may be a uphill battle if they are dealing with a large loan servicing company for approval of a short sale.

Stay tuned to see if the bill lives on…