When the federal home buyer’s tax credit program finally sunsets on Thursday, more than 65,000 Floridians will have taken advantage of the incentive program, claiming more than $455 million, according to the U.S. Government Accountability Office.
Extended and amended multiple times since 2008, the federal home buyer’s tax credit meets its final deadline on Thursday, but most of South Florida’s eligible home purchasers have either already closed or given up on the prospect of making the deadline.
In order to take advantage of the most recent version of the tax credit, home buyers had to have signed a contract to buy a home by April 30. The original closing deadline for home buyers was June 30, but Congress extended that to Sept. 30 after purchasers struggled to close in time.
In the months since April, most home buyers were able to close on their purchases, claiming either $8,000 in tax credits as a first-time homeowner or $6,500 as a repeat homeowner. The frenzy that accompanied the original April deadline has been absent in recent weeks as the program fizzles out.
“I don’t know of any of those files that are still pending,” said Anthony Askowitz, a broker and owner of two Re/Max offices. “I think the extensions were adequate for most buyers.”
According to the GAO’s report, Florida ranked third in dollars claimed, but 24th in total claimed per capita.
Homeowners found that buying in 2010 took longer than average because lending standards were tighter, banks were overwhelmed and sales of distressed homes were paperwork intensive.
“The appraisal process has taken longer, the whole underwriting process taken longer than it has in the past, so you just need more time,” said Kenneth Harney, executive director of the National Real Estate Development Center.
Most buyers who have not been able to close in the months since April 30 are involved in a short sale, where a home is being sold for less than the outstanding mortgage. In those purchases, both the seller and the bank have to agree on the purchase price, generally a lengthy process.
Sergio Duran, owner of Sergio Duran Group Real Estate Services, which handles only short sales, said delays with lenders will keep some of his clients from taking advantage of the tax credit.
“Back in April, I told them, `If the tax credit is a [make-or-break] condition for you, then go ahead and give the contract to someone else because it’s not going to happen, or it may not happen,’ ” he said.
The tax credit is, in part, credited for stronger sales this summer in South Florida. Existing sales of homes, condos and townhomes were up 52.5 percent in May in Miami-Dade County compared to the same month in 2009.
The home buyer incentive program was launched in 2008, with a version of the credit that was essentially a $7,500 loan. By 2009, the stimulus package included a tax credit of up to $8,000, which did not have to be repaid. The deadline for that program was extended from November 2009 to April 30 of this year, and the closing deadline was later pushed back from June 30 to Sept. 30.
Although the end of the tax credit has sent national home sales plunging, the likelihood of another tax credit program is slim, Harney said.
“I don’t think there will be another extension of this program, simply because, with the last amendment to the program, everybody on Capitol Hill and the lobbies said, `Hey, you have our word: We will not ask for another one of these things,’ ” he said. “And none of them are asking.”
