There still is time to take advantage of the federal housing tax credits, but would-be buyers must begin the process of searching for a home very soon to make the deadline.
Hoping to build on the popularity of the initial tax credit, Congress extended the program so buyers who sign a binding contract by April 30 and close by June 30 may be eligible for up to $8,000 in tax credits.
"We expect a greater increase in buyers to occur as the deadline gets closer," said Dan Rochon of Keller Williams Realty in Alexandria. "In many areas there is a low inventory of homes available, and buyers are struggling to compete."
Moody's Economy.com estimated the original credit helped spur sales of more than 400,000 homes nationwide. That credit was in place for much of 2009 but was set to expire in the fall. Congress extended and expanded the credit in November.
The original $8,000 tax credit is available to first-time homebuyers -- specifically those who have not owned a home during the past three years. A new $6,500 credit can be used by existing homeowners provided they have lived in their home for five straight years of the past eight years. For both types of buyers, the home purchase price is capped at $800,000. Single-family homes, condominiums, town homes and co-ops -- even houseboats -- are eligible for the credit as long as they become the new owner's primary residence.
To be eligible, single buyers cannot have an annual income of more than $125,000, and married couples cannot earn more than $225,000 a year.
Given the April 30 deadline, Rochon advises homebuyers to get busy now.
"Depending on a buyer's needs, it can take 30 to 60 days to find the ideal home," Rochon said. "It could then take 30 to 45 days from a signed contract.
"We advise our clients that are interested in purchasing to act now before the deadline increases demand from other buyers," he said. "The deadline is approaching much faster than many potential homebuyers realize."