Will the First Time Home Buyer Credit Continue?

Earlier this week, the Washington Post reported that the Senate is considering extending the time home buyers may complete their purchases.  The proposed bill would extend the date of closing for eligible home buyers to September 30 to give lenders more time to process a crush of applications.  The extension language is moving through the Senate attached to another bill that would extend a variety of tax breaks as well as emergency unemployment benefits.  

But this extension is only for home buyers that have already signed a contract to purchase a qualifying property by April 30.  Under the existing law, those home buyers must close on their transactions by June 30, 2010.

The Home Buyer Credit can provide up to $8,000 for some first time home buyers and up to $6,500 for certain current homeowners.   It is feared that many of the qualifying home buyers will not be able to meet the June 30 closing deadline because of the surge in loan volume and delays related to home appraisals and short sales. 

If you are a first time home buyer under contract, we encourage you to contact your closing attorney to make sure that the closing does indeed occur prior to June 30, 2010.