Lobbying intensifies to extend first-time home buyer tax credit

Reporting from Washington - It's one of the biggest unknowns bugging would-be buyers of houses and condos this summer: Will Congress let the $8,000 nonrepayable tax credit for first-time purchasers expire as scheduled 14 weeks from now?

Or will the credit get a second life and be extended for six to 12 months, taking pressure off buyers, real estate agents and escrow companies?

That's an especially urgent matter if you're a buyer just starting to shop and you see entry-level prices bottoming out or rebounding in many local markets. The tax credit statute requires buyers to fully close on their purchases -- not just be in escrow -- no later than Nov. 30. This doesn't leave a lot of leeway for people who haven't yet decided on a specific house and who haven't nailed down financing.

The process of negotiating offers, signing sales contracts, applying for a loan and completing the closing can easily extend for two months -- or a lot longer if things get off track.

Given the rapidly approaching deadline, what's the likelihood that Congress will allow at least a little extra time? Here's a quick overview: Although Congress is on its summer break, most members of the Senate and House use part of the August recess to meet with and listen to constituents in their home districts.

This year, the two biggest housing trade groups -- the National Assn. of Realtors and the National Assn. of Home Builders -- are spending the month mounting intense lobbying campaigns to make the case for extending the credit and maybe even expanding it. The effort is targeted first at the districts of members of the two tax-writing committees -- House Ways and Means and Senate Finance -- but is expected to cover most other members as well, according to officials of the two groups.

http://www.latimes.com/classified/realestate/news/la-fi-harney23-2009aug23,0,1446541.story