Congress considers tax credit extension for some home buyers.

Congress is considering an extension for would-be home buyers who are racing to close home sales in order to receive a federal tax credit.

The real-estate industry has warned that tens of thousands of buyers who rushed to buy homes to qualify might not close before the deadline imposed by Congress, meaning they could miss out on receiving credits worth thousands of dollars without action from Congress.

Congress last fall extended an $8,000 tax credit for first-time home buyers and added a smaller $6,500 credit for current homeowners who were buying a primary residence. To qualify for the credit, buyers had to sign purchase contracts by April 30 and must close on the transaction by June 30.

But there are so many transactions in the pipeline that the companies responsible for handling the sales, including mortgage lenders, appraisers and title insurers and real-estate brokers, say the last-minute home-buying rush in April has created bottlenecks.

On Thursday, Senate Majority Leader Harry Reid (D., Nev.) said he would back a measure to extend the June 30 closing date to Sept. 30 for buyers who had met the April contract deadline.

The National Association of Realtors estimates that between 55,000 and 75,000 home buyers who are under contract won't be able to close in time to claim the tax credit. The trade group is lobbying Congress to extend the June 30 deadline only for those buyers who met the April deadline.

"Everybody who got under contract at the end of April deserves to get the tax credit," says Stephen Adamo, president of Weichert Financial Services, a division of real-estate brokerage Weichert Realtors. "For reasons out of their control, they're in jeopardy of losing it."

That is causing heartburn for buyers like Alan Nickelson, a first-time home buyer who went into contract on a three-bedroom home in Kent, Wash., days before the tax-credit deadline in April. While he was pre-approved for a loan and will make a 20% down payment on the $275,000 home, he says the transaction has been held up because of home inspections and work repairs required by the appraiser.

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