Home-Buyers' Tax Credit Extenssion Defeated by Republicans in Senate

An amendment that was supposed to extend the closing deadline for the homebuyer tax credit by three months was defeated in Senate.

Senate Majority Leader Democrat Harry Reid (D-Nevada) proposed the extension. While the amendment itself was approved by a large margin last week (as an add-on to H.R. 4213 - the American Jobs and Tax Loopholes Act), Republican senators defeated the full measure on Thursday.

Reid has indicated that after three unsuccessful attempts, he plans to drop the matter altogether.

The amendment was to extend the tax credit deadline for closing on a home purchase to September 30. The current deadline was June 30.

The National Association of Realtors (NAR) indicated that about 180,000 homebuyers who signed contracts in time, based on the given deadline, will still not be able to make the June 30 closing deadline, mainly because of the time it takes for lenders to complete the process. The trade group estimates that 75,000 of those won’t receive the credit are private buyers of distressed properties.

NAR says its members have reported that as many as 33% of qualified applicants have already been notified by lenders that their mortgages will not close before June 30, due to the sheer volume of current applications.

The tax credit amendment was one of several pieces of a bill that was primarily intended to extend unemployment benefits for Americans out of work for more than six months.