Window quickly closing on California home-buyer tax credit

Just as Congress approved a three-month closing-date extension for first-time buyers applying for federal tax credits -- a program responsible for big spikes in home sales this spring -- California announced that its most popular tax credit program is rapidly reaching the application limit.

As of June 29, the state already had received first-time buyer applications totaling more than the $100 million allotment--about 21,000 applications--according to the state's Franchise Tax Board. The good news is that the board is accepting at least 28,000 applications, knowing that a number of duplicate, revised or invalid applications will be denied.

The tax credit is allocated on a first-come, first served basis, based on the time and date stamped on the faxed application. Applications must be faxed after escrow closes. The tax board will post the cutoff date for applications on its website 24 hours prior to its going into effect, so applicants have time to fax their documentation.