Home buyers get tax relief
Bill extends credit until Sept. 30
NEW YORK — Home buyers worried about closing their house purchases before the tax credit cutoff can relax after the government extended the deadline.
Congress sent President Obama a plan to give buyers an extra three months to finish qualifying for federal tax incentives that boosted home sales this spring.
The House approved the measure on Tuesday, and the Senate approved it Wednesday night. Obama is expected to sign it shortly.
The legislation gives buyers until Sept. 30 to complete their purchases and qualify for tax credits of up to $8,000 for first-time buyers and $6,500 for existing owners who move.
Under the original terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale.
The bill only allows people who already have signed contracts to finish at the later date. Nearly 3 million taxpayers claimed the tax credits through May 22 at a cost of more than $21 billion, according to the Treasury Department.
Congress also approved the National Flood Insurance Program, which buyers need to qualify for a mortgage for a home located in a flood zone.
“We’re elated,’’ said Ron Phipps of Phipps Realty in Warwick, R.I.
About 180,000 buyers needed the tax credit extension, the National Association of Realtors estimated.
A lot of the holdups came from the mortgage approval process. Lenders were inundated with buyers rushing to close their sale and qualify for the tax credit.
“It wasn’t issues with qualifications or bad appraisals,’’ Phipps said. “The overwhelming demand simply bogged down the system.’’ Phipps also noted that without the extension, some buyers would have walked away from their sales.
Some buyers put clauses in their contracts that let them out of the deal if they couldn’t close before the June 30 deadline.