By:Alison Rice  Posted on: November 5, 2009 3:00:00 PM on www.buildermagazine.com

House approves extension by vote of 402-12; buyers now have until June 30, 2010 to close on a home.

Lawmakers in the U.S. House of Representatives on Thursday voted 402-12 to approve an extension and expansion of the popular housing tax credit and, they hope, supporting the fragile housing market until the economy improves. The Senate passed the measure 98-0 Wednesday; the bill will now go to the White House, where President Obama is expected to sign it.

Builders, who say the tax credit has revived their buyer traffic and sales in a very difficult year, promptly celebrated.

“We commend lawmakers for acting in a bipartisan manner to extend the first-time home buyer tax credit beyond its Nov. 30 deadline and expand it to a wider group of home buyers,” said Joe Robson, who is chairman of the National Association of Home Builders and a builder in Tulsa, Okla. “The tax credit has proven to be a powerful economic incentive. Today’s action by Congress will further stabilize housing and the economy by creating new jobs, stimulating home sales, reducing foreclosures, cutting excess inventories and stabilizing home prices.”

Mortgage bankers agreed. “At a time when we are finally starting to see some signs of life in the housing and mortgage markets, extending and expanding the home buyer tax credit is a critical step to keeping the momentum,” said Robert E. Story, Jr., who chairs the Washington, D.C.-based Mortgage Bankers Association.

The tax credit approved today will take the housing market into the critical spring selling season. To receive the credit, buyers must sign a purchase agreement by April 30, 2010, and close on the home by June 30, 2010. As was the case with the credit that has been in use for most of this year, the extended credit will provide first-time home buyers up to $8,000, depending on the price of the home and their household income.

But there are several important differences, too. The newly approved tax credit also covers people who have lived in their homes for at least five years; they can claim a credit of up to $6,500 if they purchase a new home. Finally, Congress raised the income limits on the program, which will now allow singles who make up to $125,000 and married couples with a household income of $225,000 to be eligible for the credit.

The new version of the credit has a price tag for the government of $10.8 billion in lost taxes.

Alison Rice is senior editor, online, at BUILDER magazine.