Did the push for the extension work?
After strong urging from the National Association of Realtors among other industry trade groups, the Senate approved the homebuyer tax credit extension today. Previously, homes contracted before April 30th (when the tax credit expired) were required to close before June 30th in order to qualify for the credit.
Given that the lending process under current conditions cause many loans to take longer than the allotted 60 days to close, the Senate approved a proposal to extend the closing date to September 30th by a vote of 60 to 37.
According to columnist Jay Heflin of TheHill.com, the cost for extending the closing date is $140 million in this approved proposal, authored by Senators Harry Reid, Chris Dodd and Johnny Isakson. Heflin indicates that this means that “the provision reduces the deficit by $175 million over 10 years.”
The importance of this measure
The measure to extend the closing date received mixed reviews from industry insiders ranging from support to condemnation of any government intervention, but the importance of this extension is that buyers that purchased under the premise of getting a tax credit will indeed receive their credit despite a slow moving financial industry.
CC Licensed image courtesy of Brian Finifter via Flickr.com.
Joe Loomer
June 17, 2010 at 7:12 am
The measure is now attached to the Tax Extenders Bill, which needs reconciliation by the Senate and the House after mark-ups from the Senate Finance Committee. It is not law yet.
Kudos to Georgia Senator Johnny Isaakson for attempting to have the bill paid for by unspent stimulus dollars rather than adding more of a burden on the taxpayer. Shame he failed.
Navy Chief, Navy Pride
Dennis C Smith
June 17, 2010 at 5:19 pm
Joe is correct, this article is misleading. An amendment passed but the extension is not official until the bill passes. Also in this legislation is re-authorization of the National Flood Insurance Program which expired midnight 5/31/10. As result no new flood policies are being issued so transactions in federal flood zones cannot get loans unless the existing policy, if there is one, held by the seller is assigned to the buyer.