Congress Passes Tax Credit Extension

The National Association of Realtors estimates that 180,000 homebuyers who reached the first hurdle of the home buyer tax credit—signing a contract by April 30—were at risk of not reaching the second hurdle in time to claim the credit, which was closing before June 30.

The House of Representatives overwhelmingly passed its extension bill, officially called HR 5623, the Homebuyer Assistance and Improvement Act of 2010; Senators were divided but pushed the bill through on June 30th. The bill now heads to President Obama’s desk to be signed into law.

The Senate joined its counterparts in the House by approving a three month extension to the closing component of the tax credit. This extension only applies to those who had ratified contracts by April 30, and addresses the bottleneck that happened this month to bring settlements for some buyers to the table before the original June 30 deadline.

Be prepared to clarify to buyers that this extension does not apply to current shoppers. The extension applies only to those who had a contract by April 30 but were delayed on the way to the settlement table. Those buyers will now have until September 30 to close.

I am proud to report that Prosperity Mortgage did an outstanding job getting our mutual clients to settlement by the original date of June 30 - outperforming many other lenders in the industry. My thanks to the Prosperity team for helping our agents and our clients take advantage of the program and close on time.

NAR has an informative section of its website dedicated to the tax credit extension. You may want to check it out if you have additional questions.