Congress has approved a one-year extension of higher loan limits for mortgages backed by the Federal Housing Administration, Fannie Mae or Freddie Mac, and an amendment that would extend the first-time homebuyer tax credit has been incorporated into a Senate bill to prolong unemployment benefits.
A procedural vote on the unemployment benefit legislation, HR 3548, is expected today, Congressional Quarterly reported, with final passage by the end of the week.
An amendment to the bill, introduced Thursday by majority leader Sen. Harry Reid, D-Nev., would extend the tax credit to apply to homes under contract by May 1. Homebuyers would have to close by July 1 to claim a credit equal to 10 percent of the home’s purchase price, up to $8,000.
That’s the same limit in currently in place for first-time homebuyers claiming a tax credit that’s scheduled to expire Nov. 30.
But Reid’s amendment would also expand the tax credit to allow longtime residents of the same principal residence to claim a tax credit of up to $6,500. Homebuyers would have to have owned and used their principal residence for any five-consecutive-year period during the past eight years to claim the exception for longtime residents. …CONTINUED