Thanks to legislation passed Friday, another generation of ISU graduates may be able to take advantage of an $8,000 tax credit toward the purchase of a new home.

Originally, the first-time homebuyer tax credit was scheduled to expire at the end of the month.

“Right now, the way it was set up, everything had to close by November 30,” said Tom Randall, broker and owner of the Tom Randall Real Estate Team, 207 S. Third St.

But President Barack Obama signed legislation Friday that extends the tax credit until the end of April. This means graduating seniors may have the opportunity to take advantage of the program if they know where they’d like to live.

The only catch: The deal has to be completed by the Friday before finals.

“The offer has to be written and accepted on April 30, 2010, or before,” Randall said.

But if a student can manage that, he or she will receive a check in the mail for 10 percent of the home’s purchase price, up to $8,000, after filing the paperwork.

“You have instant equity in your home,” Randall said.

The extension of the credit also comes as a relief to buyers attempting to take last-minute advantage of the program. The way the previous program was written, if the house closed even one day late the buyer wouldn’t qualify for the credit.

Randall said he’d never before seen an incentive program with such a hard drop-dead date. He said he had worked to ensure his clients were on track to make the deadline, but there were probably many consumers holding their breath and hoping for timely close.

“I’m sure there were lots of people across the state and across the country,” Randall said.

In the new legislation, this issue is addressed by a tiered deadline.

“If you have an accepted offer in place by April 30, then they give you until the end of June to close on the property,” said Julie Clark, realtor with Triplett Real Estate, 410 Fifth St.

Additionally, the legislation created a new $6,500 credit for individuals who have owned a home for five consecutive years in the last eight years.

“This is great,” Clark said. “I think this is going to keep the momentum going in the real estate market.”

Randall said the legislation comes after a push from industry groups calling for extension of the program.

“The National Association of Realtors has been a huge proponent of extending the credit, because they’ve seen the impact it’s had,” Randall said. “The first time homebuyer credit has helped. It’s helped get people into the market, there’s no question about that.”

In fact, Clark said, the program has been so successful that she’s had trouble finding enough of the inexpensive homes many first-time homebuyers are interested in.

Currently, buyers may face a six-week wait for their checks after turning in the paperwork, she said.

“The only issue we have with the tax credit right now is it’s so backlogged,” Clark said. “Some are saying ‘wait until next year to file them on next year’s taxes.’”

Business Breakdown

First-time homebuyers, individuals who have not owned a home within the last three years, may be eligible for a credit equal to 10 percent of the home’s price, up to $8,000.

Current owners who have owned and occupied a primary residence for five consecutive years during the last eight years, can qualify for a credit up to $6,500.

Single tax filers earning up to $125,000 qualify for the entire credit, filers earning up to $145,000 qualify for a partial credit and filers earning more than $145,000 are ineligible for the credit.

Married tax filers earning up to $225,000 qualify for the entire credit, filers earning up to $245,000 qualify for a partial credit and filers earning more than $245,000 are ineligible for the credit.

Purchasers must live in the home for three years; otherwise, they must repay a portion of the credit.