UPDATE – July 2: This morning President Obama signed into law H.R. 5623, the “Homebuyers Assistance and Improvement Act of 2010”. This extends the homebuyer tax credit closing date to September 30, 2010. (You must have been under contract to purchase a home by April 30. This extension does NOT change that date). Source: Whitehouse.gov

UPDATE June 30, 2010 On June 29, the HOUSE passed H.R.5623, which would extend the home buyer tax credit closing deadline to September 30. You still have to have been under contract by April 30. Late on June 30, the Senate passed the bill. It is now on its way to the President’s desk for his signature, which is expected soon. We’ll update when that happens.

H.R. 4213 ”“ the bill that had an amendment to change the closing deadline for the homebuyer tax credit from June 30 to September 30, 2010 appears to be dead.

Last night the Senate failed for the third and final time to pass the American Jobs and Closing Tax Loopholes Act, which had numerous amendments attached to it, including one to extend the $8000 / $6500 first time / repeat home buyer tax credit.

A vote of 57 ”“ 41 failed to reach the 60 votes required to end a filibuster, effectively killing the bill.

There might be other versions proposed at some point, but for now, if you are eligible for the tax credit and were under contract to purchase a home by April 30, that transaction must be closed by June 30 in order to qualify for the tax credit.

My guess, and we’re talking pure speculation here, is the unemployment extension provisions of this bill will be “spun off” into a separate bill. What will happen with the homebuyer tax credit closing extension? I won’t even hazard a guess… Congress could, in theory, pass something with a retroactive date to extend the credit. Or, the credit deadline could go on as planned. Who knows…

Mainstream Media reports:

Associated Press: Republicans kill Senate jobless aid measure

Forbes: Tax Extenders Bill Is Dead But Not For Harry Reid’s Lack Of Effort

Bankrate.com: Tax breaks, homebuyer credit on hold

The Blogiverse:

Virginia Association of Realtors: Homebuyer tax credit closing deadline extension

UPDATE June 25, 2010: The bill this extension amendment was attached to died in the Senate last night. Story here.

UPDATE June 16, 2010 – Today the Senate passed this amendment to extend the closing date deadline of the Home Buyer Tax Credit to September 30, 2010. (You still had to be under contract by April 30). The vote was 60-37. The entire bill the amendment is attached to has not yet passed the Senate. The House passed the bill previously. Once the BILL passes the Senate, the differences between the House and Senate versions must be reconciled, then the House votes on the reconciled bill and then, and only then, it would be delivered to the President to sign into law.

Original Post: The current incarnation of the Home Buyer Tax credit requires contracts accepted before April 30, 2010 to close escrow by June 30, 2010 in order for the purchaser to claim a tax credit of up to $8,000 (or up to $6,500 for non-first time home buyers).

Yesterday, Senators Harry Reid of Nevada, Johnny Isaakson of Georgia, and Chris Dodd of Connecticut introduced an amendment to the American Jobs and Closing Tax Loopholes Act of 2010 (H.R.4213) that, if passed, would extend that closing deadline to September 30, 2010.

This amendment does NOT change the fact that you had to be under contract by April 30 to claim the tax credit. It just changes the date the transaction must be closed by in order to claim the credit. Apparently the Senators have realized something any agent marginally versed in real estate sales could have told them ”“ many real estate transactions, especially short sales, take more than two months to close.

H.R.4213 has already passed the House, and has wide support in the Senate. Once all the amendments (including this one) are hashed out and attached, the House and Senate versions would have to be reconciled and then sent to the President for signature.

Given the level of support for the main thrust of the bill (extending Unemployment Insurance, extending a scheduled 21.2% cut in Medicare reimbursement to doctors, and creating jobs) my guess is this will pass and the Home Buyer Tax Credit closing deadline will be extended to September 30.

But we’re talking politics and Washington, so anything can happen”¦ Someday, maybe, hopefully, they’ll let the damn thing just die.

Finally, after over two years of existence, the federal homebuyer tax credit is no more.

Expiring last night at midnight, what started as a $7500 “credit” that was in reality an interest-free loan (it had to be paid back), then became an $8,000 fully refundable true tax credit, which was extended and modified yet again to include non-first time buyers, the home buyer tax credit offered by the federal government is no more.

Yes, if you were under contract to purchase a home by midnight on April 30, and you close on the purchase by midnight June 30, you may be eligible for the tax credit.

But with the exception of certain people in the military and other federal employees stationed overseas, there will be no more people eligible to claim the tax credit.

This will be my 24th article on the tax credit, and hopefully my last unless Arizona pulls a bone-head move like California and offers a state-level tax credit program.

Yeah, I call it bone-headed for a state with budget woes the size of California’s to spend $200 million to continue to muck about in a free market. If Arizona were to go that route, while we’re in the midst of laying off teachers, cutting protective services and more, then heads should roll out the capital doors.

The 23 previous articles here have been viewed over 178,000 times and generated 862 comments. That’s almost 400 page views a day since I started writing about the tax credit in February 2009.

Obviously interest has been high.

Personally, I’m glad it’s over. I’ve never been a fan of the government trying to prop up a free market. While we have had several clients qualify for the tax credit, none that I’m aware of bought a home because of the credit.

And that is a good thing.

In my opinion, about all the tax credit did was pull in sales that would have occurred in the near future. So we wound up robbing Peter to pay Paul. Yeah sure, a few people somewhere bought a home that they wouldn’t have (which was a bad idea), thereby (in theory) “stimulating” the housing market ”“ but at what cost?

I just re-read an article I wrote in June 2009, How the Government can Fix the “Foreclosure Crisis”, where I state the government needs to stop trying to fix the real estate market and let the laws and dynamics of a free market economy play out.

Call me crazy, but I’m sticking by that opinion, and the end of the tax credit is a big step toward letting the market adjust ”“ on its own.

I’m seeing dozens of people landing on this blog every day using search terms that clearly indicate they are trying to find out if the $8000 homebuyer tax credit has either been extended, or is under consideration for another extension.

The short answer is no, neither the (up to) $8,000 first-time home buyer tax credit or the (up to) $6,500 existing home owner tax credit has been extended.

And while theoretically anything can happen in Congress (well, not anything ”“ seen the budget lately?) there are no bills currently pending in either the House or Senate to extend the tax credit.  Given that it is set to expire April 30, it appears that the homebuyer tax credit will finally cease to exist.

So if you are planning to take advantage of the tax credit, here is what you have to do:

• Be under contract to purchase a home by April 30, 2010.
• Close on that home by June 30, 2010.

There is an exception to those dates if you are in the Military or “certain other federal employees” serving outside the United States. If you fall into this category, you may have an additional year to claim the credit. 

So, if you aren’t already under contract to purchase a home, you’ve got two weeks to get yourself under contract. And be sure you can CLOSE by June 30. But please, don’t rush into a financial commitment the size and scope of a home purchase just to get an $8K tax credit. That’s the last reason to buy a home as I’ve mentioned here many times.