CONGRESS EXTENDS CLOSING DATE FOR FIRST TIME HOMEBUYER’S CREDIT

On June 30, Congress passed H.R. 5623, the Homebuyer Assistance Improvement Act of 2010, which provides first time homebuyer credit relief to taxpayers who couldn’t meet the June 30, 2010 closing date.

Under prior law, the credit expired for homes purchased after April 30, 2010.  However, if a written binding contract to purchase a principal residence was entered into before May 1, 2010 the credit could be claimed if the purchase closed before July 1, 2010.

The Act provides that if a written binding contract to purchase a principal residence was entered into before May 1, 2010 the credit may be claimed if the purchase closes before October 1, 2010.

Basically, the home buyers who were trying to close but couldn’t because of backlogs at lenders and underwriters can now claim the credit if they can close by September 30, 2010.