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Senate Vote On Home-Buyer Tax Credit Unlikely Today

There's almost no chance the Senate will vote Wednesday on extending the popular homebuyer's tax credit, which is set to expire at the end of next month, a key Capitol Hill source told CNBC.com.

There was hope last night that a vote on one of several versions might be voted on Wednesday but a battle over legislation extending unemployment benefits is taking priority and right now there's "no agreement" on that issue, according to the source.

The original intent was to attach the tax credit proposal as an amendment to the jobless benefits bill.

Some senators, especially Johnny Isakson (R-Ga.), have been pushing for both an extension and expansion of the $8,000 credit for first-time buyers for months. Sen. Chris Dodd (D-Conn.), who chairs the Senate Housing, Banking and Urban Affairs Committee, is a cosponsor of the bill, which would apply the credit to non-first-time buyers and second homes.

It would also extend the program to June 30, 2010 and current income limits would be raised to $150,000 for individuals and $300,000 for couples.

Senate Majority Leader Harry Reid (D-Nev.) and Senate Finance Committee Chairman Max Baucus (D-Mont.), however, have proposed an alternative to the Isakson bill, which applies only to first-time buyers and reduces the amount of the credit over a year's time. Their plan would extend the full $8,000 credit for four months; after that it would be reduced by $2,000 every three months.

Though that proposal is deemed more palatable to Republicans, a compromise is in the works.

Another source--a Senate aide—said the two Democraric groups are close to a compromise on the tax credit issue, but stressed passage of the unemployment bill came first.

Earlier today, CNBC's Realty Check blog reported termsof a compromise on Capitol Hill.

The House has yet to even get that far, though legislation has already been introduced. The House would probably vote on the Senate plan.

The original tax credit credit was funded under the Obama administration's massive stimulus plan, which was approved in February. Critics immediately attacked it because it only applied to buyers of a primary residence. A Nixon-era program applied to all buyers and all homes.

Nevertheless, the program has been a major force in sparking something of a revival in the depressed housing market. A realtors group has forecast the credit would lead to about a 350,000 sales that would not have ordinarily taken place. About 2 million people were expected to take advantage of the program.

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Along those lines, there is growing concern that once the existing credit expires, sales will slow dramatically. Mortgage activity has declined in the past three weeks. It generally takes two months to close on a house.