Tax credit extended

After failing by two votes to pass an extension of unemployment benefits that included an extension of the homebuyer tax credit, the Senate agreed to a separate bill to give homebuyers an extra three-months to close on a purchase that qualifies for a federal tax credits of up to $8,000.

Earlier this week the House passed the homebuyer credit extension that extends the deadline for closing tax credit eligible transactions from June 30 to September 30, 2010, so the legislation only needs the President’s signature to become law. The credit expired at midnight on Wednesday. The new legislation will make the extension of the credit retroactive. However, contingency clauses in purchase contracts and the expiration of interest rate locks were based on the June 30 expiration date for the tax credit, and the closing of many properties may be more complicated even though the credit will be extended.

Congress once again reauthorized a short-term extension for the National Flood Insurance Program to Sept. 30, 2010. The bill, HR 5569, makes the program retroactive to May 31, 2010, the date the program went on hiatus.

Source: Steve Cook, RealEstateEconomywatch.com

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