Tax Credit and National Flood Insurance Program Extended.
Bills split from Jobs Bill and passed.
After being denied as part of H.R. 4213, American Jobs and Closing Tax Loopholes Act, the first time home buyer tax credit has been extended (please see details below) and the National Flood Insurance Program is reinstated. Both (originally amendments to H.R. 4213) were split off as stand alone bills (H.R. 5623 and H.R. 5569 respectively) in order to get them passed after a vote to break a filibuster in the Senate failed.
First Time Home Buyer Tax Credit Extended to September 30, 2010
I like to call H.R. 5623 a paperwork deadline extension in order to try and avoid confusion about what this bill’s passage means. The extension of the tax credit does not allow new home buyers to take advantage of the $8,000 tax credit, it only gives those first time home buyers (and so-called “move up buyers”) that were already under contract (on or before April 30, 2010) a few extra months to close on their home. The original deadline to close your transaction for qualifying purchases was June 30, 2010, this new bill gives first time home buyers until September 30, 2010 (on or before) to wrap up their transactions and close on their new home.
There have been a lot of misleading articles about the first time home buyer tax credit extension, so please be aware:
This extension does not allow for new purchases. It is only for those already under contract on or before April 30, 2010.
The biggest beneficiaries of this change will be those who bought short sales or foreclosures and those who were caught up in the suspension of the National Flood Insurance Program.
The National Flood Insurance Program (NFIP)
The National Flood Insurance Program (also know by its initials, NFIP) expired on June 1, 2010 and has left some home buyers stuck in the middle of a lender that won’t write them a loan without flood insurance and a flood insurance program that halted activity. This reauthorization of the NFIP, will allow home owners currently in limbo with their home purchases to buy flood insurance to satisfy the lender’s requirements and move on with the transaction. This new bill reopens the National Flood Insurance Program and is retroactive, so buyers that were unable to purchase insurance, but had applied can now resume the process.
photo courtesy of Zevotron
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Comments
This is such great news! Luckily, we got all of our closings done just in time.
Sean – I was surprised that they actually got it done. I was pretty sure the last filibuster would spell the end of the first time home buyer tax credit. Why the National Flood Insurance Program was allowed to expire in the first place, I’ll never know.
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