Time expiring for homebuyers tax credit

BUFFALO, N.Y. (WIVB) - Time is running out for first-time homebuyers to cash in on a major tax break.

With the deadline for cutting a deal just three weeks away, first-time homebuyers are scrambling to get a piece of the American dream and so are realtors.

Realtor Joe Sorrentino said, "This is really what we need, because homebuying is what makes the whole world go round!"

Sorrentino and his son, Joe, Jr., told News 4 they are working 12-14 hour days to find houses for buyers and buyers for sellers. The deadline for having a signed contract in hand under the government's Homebuyer Program is April 30th. Then the sale has to be closed by June 30th.

Congress extended the program back in November, giving first-time homebuyers an $8,000 tax credit, but someone who already owns home can move up and get as much as a $6,500 credit. That is helping sellers.

"You own a house that may be a first-time buyer house, get out of your house. Get out of your house, so that somebody else can buy your house," said Sorrentino.

This hotbed of real estate activity is keeping things jumping in the County Clerk's "closing room," where buyers and sellers meet to close their home sales. But the end of another government program that held down mortgage rates is adding a sense of urgency because rates are creeping up.

Erie County Clerk Kathy Hochul said, "That increase did happen, just this past week, when interest rates went from five percent to about 5.3 percent. Historically, those are still great interest rates."

But Joe, Jr., who is looking to be a first-time homebuyer himself, warns that people need to watch out for the government's fine print.

Joe, Jr. said, "Because I am buying a duplex, I don't get the entire tax credit. The government says since I am only living in half the house, I only get half the tax credit."

As of last month, more than 60,000 New Yorkers had collected a half-billion dollars in tax credits from the government's homebuyer program. That's from an IRS report. For more information, you can call the IRS's taxpayer hotline at 1-800-829-1040.