Senate close to deal on homebuyer tax credit

West Coast time may actually work in my favor with this post, as it seems unlikely at this point in the day that the Senate will finally reach a compromise on its proposed extension and expansion of the homebuyer tax credit.

Yes, I intentionally left out "first-time" from the buyer reference, because this time around it looks like the tax credit might be available to more than just first-time buyers.

Calculated Risk, which has been closely following developments related to this measure, writes that as it stands now, the new proposal would be open to step-up buyers who had been in their current home for at least five years. The credit won't be quite $8,000, but rather a simple 10% of the home's sale price with a maximum payout of $7,290. You won't see me writing that number in every post! (See update below.)

• Bing: Keep up with developing news on the homebuyer tax credit

The rules would be different for first-time and step-up buyers (see update below). Similar to the current tax credit, individual first-time buyers must have an annual income of no more than $75,000, topping out at $150,000 for a couple. Step-up buyers have a little more leeway, with a maximum income for an individual at $125,000 and at $250,000 for a joint purchase.

But it looks like Congress may be trying to stave off some of the panic that likely contributed to new-home sales falling in September. Sure, buyers still had more than two months to close on a deal in time to meet the Nov. 30 deadline, but it might have been too close for comfort.

This proposal provides a little more cushion, giving buyers until April 30 to sign a contract, and an additional 60 days to close escrow. It's still a two-month time frame, but it'll probably give buyers a little more confidence once time gets short.

And like I wrote before about an extension for military service members being practically guaranteed, Diana Olick with RealtyCheck writes that a waiver for military indeed is part of the current proposal.

Calculated Risk initially wrote that the bill is expected to be signed Friday and that a House vote would follow, but now that timeline is up in the air. Olick writes:

The answer is that there may have been a bit of a revolt among Democrats who didn't want the controversial measure attached to the Unemployment Insurance bill.

Such is the way of politics. But regardless of the logistics, it sounds like an extension will eventually make its way down the pipeline, so stay tuned.

Update: I really spoke too soon. Before the end of the day, the Senate may not have made a decision one way or another, but it did change the proposal a bit, according to Calculated Risk and Olick.

The maximum payout indeed would remain at $8,000 for first-time homebuyers, but it also was reduced to $6,500 for move-up buyers who have lived in their current home, again, for five years.

And it turns out that income eligibility would be the same for new and step-up buyers, with the cap at $125,000 for individuals and $225,000 for joint applicants.