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House Extends Home Buyer Tax Credit Closing Deadline

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By Ellen Yan

RISMEDIA, July 1, 2010—(MCT)—The House of Representatives introduced and passed a proposal to extend the original June 30 closing deadline for home buyers who want to get up to $8,000 in tax credits.

The Home Buyers Assistance Act of 2010 would push the deadline to midnight September 30, 2010 on contracts that were signed by the midnight April 30 deadline. The vote was 409 to 5, with 18 not voting.

First-time buyer Juan Martinez of Hicksville had prayed for such a reprieve. “That’s awesome,” said Martinez, whose chosen home in Hempstead Village is ready to close except for one thing—a delay in up to $110,000 in down payment assistance grants. He added, “It’s like a roller-coaster ride until the bill is signed. I’d rather not get too excited about it.”

The bill will now be forwarded to the Senate, where the Democrat-controlled chamber had attached the same proposal to versions of the jobs and economic stimulus bill, which failed twice this month due to lack of support from Republicans expressing concern about the deficit.

The National Association of Realtors estimated that up to 180,000 people would bust the existing deadline, including almost 9,200 in New York State. A spokesman for the trade group said the proposal might not have to go through the usual House-Senate talks over bill differences.

“We think this has a good chance, but I don’t want to build up too many hopes,” spokesman Lucien Salvant said with a laugh, “because anything can happen in the hallway between the House and Senate.”

Veronique Bailey, a Brooklyn, N.Y. resident and teacher, had signed a contract for a six-bedroom Amityville, N.Y. house in September, but was delayed by, among other things, permit and code problems in her chosen home. “It makes you vulnerable and it’s not in your control.”

Even with an extension, some home closing deals might fall apart. Some contracts say the deals must close by the end of June 30. That gives sellers a chance to walk away.

But financial consultant Greg Rende of Massapequa, N.Y. has no worries, even though he’s busting the deadline. The developer of a new Amityville condo complex has not finished his unit, he said, but Rende got a backup clause in the contract. “If we weren’t closed by June 30 and the builder was not ready,” Rende said, “he would have to pay me the $8,000 I don’t get for the first-time home buyer credit.”

In normal times, two months to close would be doable. But these are not normal times, and Rende thinks Congress did not consider how swamped lenders and lawyers would be.

Copyright (c) 2010, Newsday, Melville, N.Y.

Distributed by McClatchy-Tribune Information Services.

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