Your not hearing rumors.  Congress is actually considering extending the Home Buyer Tax Credit.

Well, sort of.  Legislation has been drafted to extend a portion of the original legislation to September 30th 2010.

H.R. 5623, the current legislation in the House of Representatives, will extend the deadline for closing a property sale for those home buyers who entered into a contract to purchase their new home on or before April 30th 2010.

The reason why their extending the tax credit is because a large number of home buyers who met the contract requirement of the Home Buyer Tax Credit legislation have not closed on their home purchase and are no longer eligible.

The reasons offered for why nearly 200,000 eligible home buyers are still in contract and not anywhere near closing on their purchase is due to the bottleneck of mortgage applications still being processed.

In addition, it’s estimated that a large percentage of those who missed the June 30th 2010 deadline is because many of them are buying a home in a foreclosure short sale.

Congress has become aware of the troubled processing standards Banks have implemented for short payoff proposals which has caused some home buyers to be in contract longer than industry norms.

The average contract period for home buyers in New York City range from 45 days to 70 days.

For those home buyers in contract to purchase a home in a short sale in New York City, the average contract period has ranged between 120 days to 270 days.

Congress is expected to pass the legislation retroactive in order to insure home buyers who have not closed on their purchase can still be eligible to claim the tax credit of either $6,500 or $8,000.

What’s also obvious in this legislation is that Congress and the Obama Administration will not seek to extend the full legislation for another round of home buyers still shopping for a home to purchase.

Without an extension of the full legislation, Brooklyn and the rest of New York City could face a longer road to recovery and stability in home values.

(are we on course for a return to the despair of the late 1970′s?)

We’re officially in free fall at this point.

Michael A. Corley is a licensed Real Estate Broker and Exec. Vice President at Corley Realty Group.  Born and raised in Bedford Stuyvesant, he now resides in Crown Heights with his wife and children

Home Buyer Tax Credit