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Home Buyers Get Tax Credit Closing and Flood Insurance Extensions Without Lapse in Coverage

Wednesday, July 7, 2010

REALTORS® commend Congress for the timely passage of two bills to extend the home buyer tax credit closing deadline and reauthorize the National Flood Insurance Program. The tax credit closing deadline and the NFIP reauthorization were extended to September 30. 

Extending the tax credit closing and flood insurance deadlines will help provide additional stability to real estate markets across the nation, according to the National Association of REALTORS®. The passage of both bills has "opened the door to the American dream of homeownership to thousands of home buyers who would have been shut out of the homes of their dreams through no fault of their own," said the REALTOR® group's president Vicki Cox Golder.

Up to 180,000 home buyers were in danger of losing their tax credit through no fault of their own had Congress failed to pass an extension to the home buyer tax credit by June 30, when the closing deadline expired. Included in that number were 17,700 home buyers in California, according to estimates by the national Realtor group. These are not buyers who just entered into the market. These are buyers who previously met all the qualifications for the tax credit, but found themselves at the mercy of a workflow jam with lenders or other delays such as lapses in the National Flood Insurance Program, Rural Housing Service, and new home construction, and might not be able to complete the purchase of their homes by the current deadline, according to NAR president Vicky Golder.

The passage of H.R. 5623, the Homebuyer Assistance and Improvement Act, applies the homebuyer tax credit closing deadline extension only to homebuyers who have ratified contracts in place as of April 30, 2010, but could not close before June 30. The legislation is designed to create a seamless extension of the new closing deadline for eligible transactions to September 30. There will be no gap between June 30 and the date the president signs the bill into law.

Senate passage of the National Flood Insurance Program Extension Act of 2010 (H.R. 5569), reauthorizes extension the NFIP until September 30, allowing currently stalled transactions to move forward. The bill is retroactive and covers the lapsed period from June 1, 2010, to the date of enactment of the extension. Any new policy applications or renewals that were signed and submitted during the lapsed period will be effective from the date of application. In the case of waiting periods, the waiting period will start from the date of application.

"We are glad the Senate and the House passed both pieces of legislation. This has eased the minds of many home buyers," said Jeff Bell, president of the Silicon Valley Association of REALTORS®. "It would be a tragedy for them not to be able to complete the purchase in time to claim the credit. We also know that thousands of property owners seeking flood insurance policies will now be able to close transactions."


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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