When key senators struck a deal on October 30 that allowed not just the extension but also the expansion of the homebuyer tax credit to include existing owners, one important part of the deal was not widely reported.

This is it. No more extensions. When April 30 comes and goes, the tax credit for everyone is over and buyers have only until June 30 to close. With the prospect of getting more than they bargained for in the short term, the housing lobby agreed.

During the annual conference of the National Association of Realtors’ annual meeting in San Diego last weekend, lobbyists for NAR recounted the terms of the agreement. In the end, lawmakers “made us promise, practically in blood, that we would not come back,” said NAR’s Linda Goold. She said NAR agreed that, “barring market surprises,” Realtors would not seek another extension of the tax credit, according to Inman News Service.

If credit critics are right, the dawning of April 30 will return the housing markets more or less to where they are today. Inventory will be reduced at significant cost to the Treasury, but odds are that foreclosures will refill the MLSs with plenty of properties for sale. A sharp drop in sales, like those experienced in many markets in October as the credit deadline loomed, is almost a certainty. How long low sales levels linger will depend in part on interest rates.

About the same time the credit goes away, something more serious will hit the housing markets, the end of the Federal Reserve’s programs to buy up $1.25 trillion of mortgage-backed securities and to lend as much as $175 billion to Fannie Mae and Freddie Mac to do the same. Mortgage-backed securities are sold to investors and the better the market for them, the lower the interests that consumers pay. These government programs to buy mortgage securities have helped to prop up the mortgage-backed securities markets and keep mortgage rates at record low levels for nearly a year. The Fed announced two weeks ago that both are going away April 10.

The Fed said that it will gradually slow the pace of its purchases of mortgage-backed securities and that these transactions will be completed by the end of the first quarter of 2010. Agents acting on behalf of the Federal Reserve Bank of New York’s Open Market Trading Desk will gradually reduce the average weekly purchase amounts of agency mortgage-backed securities. Additionally, the Open Market Trading Desk will gradually reduce both the size and frequency of individual agency debt purchase operations, with the frequency of agency debt purchases remaining, on average, once per week before declining to once every two weeks at some point during the first quarter of 2010.

Ending Federal Reserve’s direct purchases and its financing of Fannie’s and Freddie’s purchases of mortgage backed securities, a housing market subsidy that is many times more costly than the tax credits, almost certainly will be felt by consumers and the result will be significantly higher interest rates. Coupled with the end of the tax credit, will the fragile housing recovery suffer a double whammy as it goes cold turkey from two major Federal government subsidies at virtually the same time.