On June 30 both houses of Congress approved legislation that extends the closing deadline for qualified first-time and repeat home buyer tax credit purchases from June 30, 2010, to September 30, 2010. President Obama signed The Homebuyer Assistance and Improvement Act of 2010 into law on July 2.

The extension only applies, however, to those home buyers who had a binding sales contract in place prior to May 1, 2010. 

This legislation provides an additional three months for home builders and lenders to complete construction and backlogged paperwork in order for home buyers to close on the home and still receive the tax credit. 

As of May 22, the Department of the Treasury indicates that for the tax credit program as a whole, more than 3 million home buyers have claimed the credit for a total tax savings of more than $21 billion.  The extension will help thousands of otherwise qualified home buyers claim the credit for sales that weren’t able to close in time due to conditions beyond the buyer’s control.

In past weeks, Senators Reid and Isakson offered amendments to the tax extenders legislation (H.R. 4213) to move the deadline to the end of September.  However, after three failed attempts to muster 60 votes to end debate on the bill, it appeared that the deadline extension effort would not succeed.  On June 29, the House approved fully paid-for, stand-alone legislation (H.R. 5623) introduced by Representative Dahlkemper of Pennsylvania by a vote of 409-5. The Senate unanimously approved the legislation on June 30. 

The $140 million cost of the extension is completely paid for by several small revenue raisers, including a provision that increases the penalties associated with bad electronic payments of tax liability.

NAHB’s consumer website http://www.federalhousingtaxcredit.com/ will be updated shortly. You can also find information on the home buyer tax credit on NAHB’s tax credit Facebook page and Twitter feed.