Homebuyer tax credits near Senate approval

Senators agreed Wednesday to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.

The tax credit provides up to $8,000 to first-time homebuyers but expires at the end of November. The Commerce Department said Wednesday that new home sales fell 3.6 percent in September. Some industry representatives blamed uncertainty about the tax credit.

Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.

The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close.

Senators still were negotiating the expansion of a separate tax credit that lets money-losing businesses receive refunds for taxes paid in previous years.

Senators in both parties hoped to add both tax provisions to a bill that would give people running out of unemployment-insurance benefits up to 20 more weeks of federal aid. The Senate could vote on the overall bill today, but lawmakers were haggling over unrelated amendments Wednesday night.

Republicans want to restrict federal money to the beleaguered community activist group ACORN and require that people receiving jobless benefits be processed through E-Verify, an Internet-based system that employers use to check on the immigration status of hires.

Majority Democrats refuse to add the amendments.

If passed, the bill would go to the House, which voted to extend unemployment benefits last month. House leaders also back an extension of the homebuyer tax credit.