Contractually, they do not have to honor the discount.
Practically, I have seen this happen several times and they have always extended the discount through closing.
Very much appreciate your offer to come back and let us know how it turns out.
However, it likely depends on how the offer was written. If the seller paying the buyer's closing costs was part of the offer, which it can be in ANY offer regardless of this "incentive" campaign, the deadlines may not apply at all.
Here is information directly from Fannie Mae's HomePath website. The deadline has been extended so you should be just fine. Congratulation on your new home!
HomePathÂ® Buyer Incentive: June 14 â€“ October 31
Fannie Mae is currently offering buyers up to 3.5% in closing cost assistance through October 31, 2011.