Home Buyer Tax Credit Extended for Pending Sales

President Barack Obama has signed legislation into law giving consumers already in the process of buying a home three more months to close on their homes and still qualify for a popular tax credit from the government.

First time Home buyers who signed contracts by April 30 who failed to close by the original June 30 deadline will now have until September 30 to complete their purchases. The $8,000 tax credit for first time homebuyers and $6,500 credit for others purchasing a new primary residence was a highly popular temporary measure to spur home sales during the economic downturn.

The measure will help as many as 180,000 home buyers who would have otherwise missed the June 30 deadline because banks and settlement offices were dealing with a huge volume of people rushing to close on their deals signed before April 30. Nearly 3 million taxpayers claimed the tax credits through May 22 at a cost of more than $21 billion, according to the Treasury Department.

Additionally, without the extension some home buyers would have walked away from their sales. Some money-minded buyers put clauses in their contracts that let them out of the deal if they couldn't close before the June 30 deadline.