Before adjourning for its week-long July 4 recess, Congress approved legislation that would give home buyers more time to qualify for a tax credit by extending the deadline for closing on a home purchase from June 30 to Sept. 30. President Obama signed H.R. 5623, The Homebuyer Assistance and Improvement Act of 2010, into law on July 2. The extension only applies, however, to those home buyers who had a binding sales contract in place prior to May 1, 2010.

For home builders and lenders, this legislation provides an additional three months to complete construction and backlogged paperwork in order for home buyers to close on their home and still receive the tax credit. The $140 million cost of the extension is completely paid for by several small revenue raisers, including a provision that increases the penalties associated with bad electronic payments of tax liability.

As of May 22, the Department of the Treasury indicates that for the tax credit program as a whole, more than 3 million home buyers have claimed the credit for a total tax savings of more than $21 billion. The extension will help thousands of otherwise qualified home buyers claim the credit for sales that weren't able to close in time due to conditions beyond the buyer's control.

The news on the extension will be updated on NAHB's consumer website http://www.federalhousingtaxcredit.com.

Additional Reference Materials

$8,000 Home Buyer Tax Credit at a Glance (from NAHB website) 

The information on this page pertains to the American Recovery and Reinvestment Act of 2009. 

• The tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
• The tax credit does not have to be repaid.
• The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000.
• The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

Frequently Asked Questions About the Home Buyer Tax Credit 

The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.

This link provides answers frequently asked questions and provides basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.