Reid seeks extension of home-buyer tax-credit program

Senate Majority Leader Harry Reid said he will seek a three-month extension of the deadline for closing home purchases under the government's $8,000 home-buyer tax-credit program.

Reid, a Nevada Democrat whose state has been among the nation's worst-hit housing markets, said the program's success has created a backlog that could keep some buyers from completing transactions by the current expiration date of June 30. His plan would move the deadline to Sept. 30.

"By extending the transaction deadline, we can ensure that everyone taking advantage of this credit can complete the purchase of their new home," Reid said in a news release.

Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale.

The proposal would only allow people who already have signed contracts to finish at the later date.

Reid introduced the proposal as an amendment to a bill that would extend jobless benefits through the end of November.

The National Association of Realtors sought the extension amid reports that lenders are telling would-be borrowers that their loans won't be ready in time to meet the June 30 cutoff.

"It's already resulting in a growing number of canceled transactions," Realtors spokesman Lucien Salvant said yesterday in a telephone interview. "Some people won't be able to buy their homes if they can't get the tax credit." Among the transactions at risk are an estimated 55,000 to 75,000 so-called short sales of homes being purchased for less than the existing debt on them.

The Realtors association estimates that 4 million buyers have taken advantage of the tax credit since its creation last year. Of those, one-fourth wouldn't have purchased a home without the tax credit, the group said. With AP