Obama to Extend Homebuyer Tax-Credit Deadline


housePresident Barack Obama plans to extend a deadline for first-time homebuyers to complete purchases and qualify for an $8,000 tax credit, a White House official said.

Obama may sign the extension as soon as today, the person said, declining to be identified before the White House receives the bill from Congress. Qualified homebuyers who signed purchase contracts before April 30 will have until Sept. 30 to complete paperwork and settle on the house. The original settlement deadline was June 30.

“They’re cheering out there, they’re really rejoicing,” Lucien Salvant, a spokesman for the National Association of Realtors, said of homebuyers. The group sought the extension.

The House voted 409-5 on June 29 to extend the deadline, and the Senate approved the measure on a voice vote last night. Republicans, including Senator Jim DeMint of South Carolina, had tried to block the extension, calling the tax-credit program flawed.

“We only created a bubble, which will eventually burst,” DeMint said on the Senate floor late yesterday as the deadline was about to expire. “For the people who haven’t closed on their homes by today, it’s not that they won’t get their house, only that they won’t get a taxpayer subsidy for having bought a house now rather than later.”

The incentive, enacted last year as part of an economic stimulus package, offered an $8,000 tax credit to first-time homebuyers.

To qualify, homebuyers had to sign a purchase contract by April 30 and finish the deal by June 30. A jump in sales produced a backlog of paperwork that kept some homebuyers from completing transactions by the June 30 deadline. As many as 180,000 home buyers might be helped by the extension, Salvant said.

The tax credit may have fueled a temporary increase in home sales, which fell after the April deadline passed. Sales of new homes dropped 33 percent to a record low of 300,000 in May, the Commerce Department reported. Sales of previously owned homes fell 2.2 percent that month, according to the National Association of Realtors. Applications for loans to purchase properties fell at the end of May to the lowest level since 1997, according to a Mortgage Bankers Association report.

{BusinessWeek/Noam Amdurski-Matzav.com Newscenter}


  1. It is bad to encourage bad polisy, but that what Obama is doing. Why help out first time buyers that can’t afford to buy homes. What’s gotten us into this ressesion in the first place. The fact that people can’t bay their morgatges. This is terrible.