On Friday, President Obama signed a three-month extension on the deadline for home buyers to close on a home in order to qualify for a federal home-buyer tax credit of up to $8,000.  Previously, those buyers who had entered into contracts prior to April 30 had until June 30 to close on the deal.  They now have until September 30.

The National Association of Realtors had estimated that approximately 180,000 otherwise eligible buyers were likely to lose out on the tax credit because they would be unable to close by the deadline.  Many of the delays were due to complex short-sales that couldn't be approved in time to meet the June 30 deadline.

First-time home-buyers can qualify for a credit of the lesser of $8,000 or 10% of the purchase price.  Long-time residents, those who owned and used the same home for 5 consecutive years during the previous 8 years, can qualify for a credit of the lesser of $6,500 or 10% of the purchase price.  A buyer may not qualify if the purchase price of the new home is more than $800,000, or the buyer's adjusted gross income is more than $145,000, depending on when the home was purchased. 

When claiming the credit, a copy of the settlement statement showing all parties' names and signatures, the property address, the contract sales price, and the date of purchase, must be attached to the return.  Long-time residents should also attach a copy of their Mortgage Interest Statements verifying their long-time resident status.

The credit must be repaid if the home is disposed of, or it ceased to be the taxpayer's main home, within three years of purchase.  This includes situations where the home is sold, converted to business or rental property, destroyed, condemned, or foreclosed on.