* Federal Tax Credit Extended to September 30
Earlier today, President Obama signed legislation to extend the deadline for taking advantage of the Federal tax credit offered to home buyers.To take advantage of the credit [$8,000 for first-time home buyers, $6,500 for most everyone else], you still have to have a contract dated on or before April 30. Now, however, you have until September 30 to complete the transaction.
Why does this matter? The National Association of Realtors has estimated that 180,000 eligible buyers were not going to complete their purchase prior to the June 30 deadline. There are several possible reasons for this. With the looming deadline, many lenders were overwhelmed with applications [I know of one lender who had an internal deadline prior to April 30 for loan applications] and were simply unable to complete their paperwork in a timely manner. Also, if a home buyer was looking at a foreclosure or a short sale, the added delays could easily push a closing out past 60 days. Now those people have another three months to finish up the transaction.
As an added bonus, the same legislation reauthorizes the National Flood Insurance Program. this ends the legal limbo some buyers were in where they were required to purchase flood insurance, but the Feds weren’t offering it. The combination of these two measures should bring some additional stability to a housing market that could certainly use it.
Tags: buyers
