Congress has sent President Barack Obama a plan to give homebuyers an extra three months to finish qualifying for federal tax incentives that boosted home sales this spring.
The legislation would give buyers until Sept. 30 to complete their purchases and qualify for tax credits of up to $8,000. Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale.
The bill only allows people who already have signed contracts to finish at the later date.
The House approved the measure on Tuesday.
Legislation in the Senate, sponsored by Majority Leader Harry Reid, was approved Wednesday night by unanimous consent.
The popular tax credit has helped to stabilize the nation's slumping housing market. More than 2.6 million taxpayers claimed the tax credit through April — claiming $18.7 billion — according to the Internal Revenue Service.
The Realtors group says the tax credit has generated 1 million new home sales that wouldn't have happened otherwise.
The bill would also make it easier for the IRS and state prison officials to share information about inmates in an effort to fight fraud. The Treasury Department's inspector general for tax administration reported last week that nearly 1,300 prison inmates had improperly received more than $9 million in homebuyer tax credits while they were locked up.
The report said the IRS did not have up-to-date information on inmates.
The tax credit for first-time homebuyers was part of President Barack Obama's economic recovery package enacted last year. In November, Congress extended the credit and expanded it to longtime owners who bought new homes. First-time buyers were eligible for a tax credit of up to $8,000. Current owners who bought and moved into another home could qualify for a credit of up to $6,500.
The Realtors group has been pushing hard in Congress for the extension. Mortgage lenders, the trade group says, have been swamped with borrowers trying to get approved by the end of the month.
Delays with mortgage lending and appraisal companies have meant that home sales are taking far longer to complete this year.
"A lot of lenders weren't able to handle the influx of loans that came with the tax credit," said Lucien Salvant, a spokesman for the National Association of Realtors.
There have been particularly long delays for buyers of so-called short sales — ones in which banks agree to accept less than the total mortgage amount. In Las Vegas, for example, short sales made up nearly a third of all sales last month.
Many banks "just don't have the process to the point where they can do it in a reasonable amount of time," said Jack Woodcock, a real estate agent in Las Vegas. Extending the tax credit deadline, he said, would be a welcome relief to those borrowers, many of whom "made their decision based upon that tax credit."