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Homebuyer credit extension heads to Obama

By Tami Luhby, senior writer


NEW YORK (CNNMoney.com) -- First-time homebuyers will have until Sept. 30 to close on their purchases and land an $8,000 tax credit under a bill passed by the Senate late Wednesday.

President Obama is expected to sign the bill, which was overwhelmingly approved by the House on Tuesday. The deadline had been June 30.

The bill doesn't help anyone currently shopping for a home. Buyers must have signed a contract by April 30 to qualify for the tax break. At issue is when the deal must be finalized.

Qualified existing homeowners also have until Sept. 30 to close on new homes and receive a tax credit of up to $6,500.

Congress has been trying to pass the extension for the last month, but it got caught up in Washington politics. Only when it was separated from a larger jobs bill did deficit-wary lawmakers sign off on it. The extension will lower the deficit by $9 million over a decade since it is offset by certain other provisions.

An estimated 200,000 people have missed out on the tax credit because they wouldn't have been able to close by the end of business Wednesday. Many are trying to take advantage of short sales, which are complicated deals to complete.

The Senate approved the stand-alone homebuyers tax credit shortly after a failed attempt to advance a bill that combined the credit with an unemployment benefits extension.

Senate Majority Leader Harry Reid, D-Nev., said the chamber will take up the benefits bill again once a replacement for the late Senator Robert Byrd, D-W.Va., is named. Byrd, the longest serving member of Congress in history, died Monday at age 92. To top of page

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