WASHINGTON — Home buyers would get an extra three months to complete their purchases and qualify for a generous tax credit under a bill overwhelmingly passed by the House yesterday.
Under current law, buyers who signed purchase agreements by April 30 have until today to close on the sale to qualify for tax credits of up to $8,000. The bill would give buyers until Sept. 30 to complete their purchases.
The extended deadline only applies to people who signed purchase agreements by April 30. The National Association of Realtors estimates that about 180,000 home buyers who already signed purchase agreements are likely to miss today’s deadline.
“We owe this to the people who have essentially followed the rules who are caught by a closing date,’’ said Representative Sander Levin, Democrat of Michigan and chairman of the House Ways and Means Committee.
The bill passed 409 to 5. It now goes to the Senate, where majority leader Harry Reid, Democrat of Nevada, has sponsored a similar measure.
The popular tax credit has helped to stabilize the nation’s slumping housing market.
The Realtors group says the tax credit has generated 1 million new home sales.
The bill would also make it easier for the IRS and state prison officials to share information about inmates in an effort to fight fraud. The Treasury Department’s inspector general for tax administration reported last week that nearly 1,300 prison inmates had improperly received more than $9 million in homebuyer tax credits while they were locked up.
The tax credit for first-time home buyers was part of President Obama’s economic recovery package enacted last year. In November, Congress extended the credit and expanded it to longtime owners who bought new homes. First-time buyers were eligible for a tax credit of up to $8,000. Current owners who bought and moved into another home could qualify for a credit of up to $6,500.
The Realtors group has been pushing hard in Congress for the extension. Mortgage lenders, the trade group says, have been swamped with borrowers trying to get approved by the end of the month.
The Massachusetts Association of Realtors said that up to 3,930 Bay State buyers could have lost the advantage of the credit if the extension were not passed.
Associated Press and Chris Ready of Boston Globe June 30, 2010