Home Buyers Get Tax Credit Extension

Congress has given some home buyers an extra three months to close escrow and qualify for the federal tax credit.

To get the credit, buyers must have entered into a binding contract no later than April 30 and close by Sept. 30. The previous closing deadline was June 30, but some buyers, especially those involved in short sales, complained that they didn't have enough time to get all parties on board and sign the papers within that time frame.

Congress had tried to extend the deadline by putting the measure into a big bill that would have extended expiring tax provisions and unemployment benefits, but that bill kept failing test votes in the Senate.

At the 11th hour, Congress put the measure into a separate bill, the Homebuyer Assistance and Improvement Act, HR5623. The House passed the bill Tuesday and the Senate approved it late Wednesday. President Obama is expected to sign it.

The extension only applies to people who had ratified contracts in place as of April 30 that have not yet closed. It does not create a new tax credit.

The federal tax credit is up to $8,000 for first-time buyers and $6,500 for repeat buyers. The newly purchased home must be used as a primary residence. Other restrictions apply.