Mortgage firms and real estate attorneys scrambling to beat the June 30 closing deadline for homebuyers to qualify for a federal tax credit now have three more months to get it done.
The Senate amended a bill Wednesday that extends the closing deadline until September 30 to give lenders some breathing room.
Nevada Sen. Harry Reid, who sponsored the amendment, said the extension was needed to help clear more than 180,000 home sales across the country.
Attorney Richard Klein of the Diamond Law Group in Mineola said his office prepared to close tax credit deals by June 30, but he added that a lot of things are outside of everyone’s control.
“It alleviates some of the pressure,” Klein said.
The attorney noted that the extra time to close may not stretch the work out too far since home sale contracts usually have self-imposed deadlines and mortgage commitments expire as well.
The amendment was tacked onto a bill that extends unemployment insurance benefits which was approved by a 60-37 vote. The House passed an earlier version of the bill in December and the Senate is currently working on resolving differences between the two bills.
The National Association of Realtors said in a statement that it supported the amendment because as many as one-third of qualified tax credit applicants were told by lenders that their loans wouldn’t close before June 30 because of the backlog.
The tax credit gave up to $8,000 for a first-time homebuyer and $6,500 to repeat homebuyers in contract by April 30.