House OKs homebuyer tax credit extension

WASHINGTON, Nov. 3 (UPI) -- The U.S. House Tuesday approved legislation that would extend unemployment benefits and expand an $8,000 tax credit for first-time homebuyers.

The tax credit is scheduled to expire Nov. 30. The bill would extend it to apply to home purchases under contract before May 1, 2010.

The tax credit is attached to a bill that would extend unemployment benefits by up to 20 weeks for people who have been out of work for long periods. Unemployment reached a 26-year high of 9.8 percent in September, and the latest figures are to be released Friday.

The Senate could vote on its version of the measure as early as Wednesday night and the House could take it up for final approval this week, The New York Times reported Tuesday.

The measure approved by the House Tuesday would expand the homebuyer tax credit to apply to people who have owned a home for at least five years. They could get a $6,500 tax credit on the purchase of a new home.

Income restrictions would be relaxed, meaning more people could take advantage of the program.

The extension and expansion of the tax credit would cost an estimated $11 billion in addition to the $10 billion that has been spent on the existing homebuyer tax credit.