Good News For Buyers Qualifying for the Home Tax Credit…

Home buyer’s looking to keep their homebuyers tax credit in play received good news today. The bill which extends the timeline for those buyers who had a qualified offer in to purchase a home before April 30th and receive the home tax credit was passed by the Senate last night. The original bill for the extension of the home tax credit had been tied to the additional unemployment benefits bill which had failed in the Senate earlier this week. Heavy lobbying by the National Association of Realtors® (NAR) enabled the bill to be introduced as a free standing bill which passed the House of Representatives and Senate. The bill now awaits the President’s signature.

The bill also contains additional provisions to tighten the rules to prevent tax credit fraud. Given the news earlier this month concerning prison inmates, some who are in for a life sentences receiving benefits from the tax credit, this should be a welcome inclusion to the bill. One can only imagine how many other scams are defrauding the program are out there, hopefully the provisions in this bill can curtail a good portion of the fraud.

The federal home tax credit was part of the American Recovery and Reinvestment Act signed into law in February 2009. The $8,000 credit was available to first time buyers who purchased a house after January 1, 2009 and was originally scheduled to expire on November 30, 2009. The credit was seen to have stimulated home sales, especially in the lower price ranges, and in November Congress extended it through April 30 and added a $6,500 tax credit for non-first-time buyers.

Those who had qualified offers in before the April 30th date were given until June 30th to close their transaction. In many areas title companies struggled with the added push of home buyers trying to complete their deals creating a backlog that could not be cleared by the deadline. Others struggled with cumbersome short sale proceedings, even the most straight forward transactions can take an excoriating amount of time to complete. The new date to complete transactions for the tax credit is September 30th.