Tag Archives: homebuyer tax credit

Tax Credit Perks

There are a lot of tax credit perks. The new law that was extended past November 30, 2009 has a lot of benefits. The new law applies to step up buyers moving up to their next home. If you have lived in your home as the primary residence for 5 of the last 8 years then you qualify. See links below for more helpful information.

But did you know that if you are stepping up and having trouble selling your home, you can still qualify without actually selling the first home. But. . . you must purchase the second home as your primary residence.  Not too bad. It is time to move. . . . Are you ready?

“There is no requirement that existing homeowners must have sold their home to be eligible for the $6,500 tax credit. However, Weichert encourages existing homeowners who want to benefit from this incentive to move quickly, particularly those who prefer to first sell their current home before purchasing a new one.” Quoted from : RIS Media – Repeat Buyers Need to Act Fast to Capitalize on Expanded Tax Credit

Tax Credit Details

Additional Tax Credit Details from Realtor.org

Frequently Ask Tax Credit Questions

AKHome.info Tax Credit Archives

Using Homebuyer Tax Credit for Down Payment

Buyers have inquired, and articles have been written about the possibility of using the first time homebuyer tax credit, or at least part of the funds, for a down payment on the purchase of home.  I had written previously about this opportunity..

The key to having funds be used for a down payment was finding someone who would fund this amount because it would really have to be a loan. Well, I actually saw this happen.  I recently had a closing in October, where the buyer for my sold listing actually did use the tax credit for the down payment.  The transaction contained seller’s assist (where the seller pays part of the closing fees) and the balance due after that was around $4k. PHFA (Pennsylvania Housing Financing Agency) backed the balance due amount. The buyer’s have 12 months to pay the approximately $4K amount back as an interest free loan. The funds to pay back would come after filing their taxes in the spring.  What we were told at the closing is, if they chose not to pay it off it would become a loan and would be a lien against the property.

What I did find out at the closing was the PHFA had run out of funds at the point of this closing so we were not likely to see funding again in the near future from PHFA. It was a great deal for the buyer because with the seller assist, VA backed funding, and the tax credit funds for the down payment, the cash due at closing from the buyer was “Zero dollars”.   This is extremely rare but apparently it does happen. The interesting thing was the buyer even had a credit due them at closing but due to the loan rules the buyer was not able to get any money in their pocket after the transaction so it had to go onto the principle of their loan.

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Photo Copyright 2007, Amy S Myers

Tax Credit Extension Signed into Law by President

Great News! It is official. The President has sign the homebuyer tax credit extension to law. Activity has already picked up in the area this week.

“Obama Signs Extended Tax Credit into Law”-Â Expected to contribute approximately $22 billion to the economy, Congress overwhelmingly passed a bipartisan measure this week extending the $8,000 home buyer tax credit to April 30, 2010″. . . . .

More people are now eligible to take advantage of the law, which includes a $6,500 tax credit for buyers who are current home owners and have lived in their home for five of the past eight years.”Â

“Which Properties Are Eligible? Â – The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Will the Credit Be?  – The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:

1) The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.

2) The buyer’s income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.” – Quoted from Realtor.org

Additional details on the tax credit

Here is a helpful chart on the new home buyer tax credit changes. You will be able to compare the first home buyer tax credit plan that expires November 30, 2009 and the new plan that starts December 1, 2009. Chart supplied by the NAR (National Association of Realtors)

Additional info from CNN.com

“The bill also made more homeowners eligible to claim the credit on their taxes. First-time buyers — those who have not owned a home in the past three years — still qualify for an $8,000 rebate. But now people who want to trade up can also qualify. Those who have owned and occupied a residence for at least five years out of the past eight can claim a $6,500 tax credit if they close on a purchase by the end of June.

“The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules,” said Gibran Nicholas, chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers.  “

Times are Historic to Buy a Home

It is a great time for people to get into the housing market as I have mentioned over the last few months.  There is still time to take advantage of the market conditions but don’t wait too long. Things will change.

Believe it or not but I have had different buyers bidding and buying properties less than $20K and some that do not need that much work. It is an amazing deal and some did not need always need a major overhaul. As the market begins turn turn around there are going to be less opportunities like this. The deals that are there will be more competitive. Some houses such as these can have mulitiple bids on them (as many as five or ten bidders or more). If you see a deal move fast and bid competitively whether for investment property or for owner occupied.

It appears that first time home buyers have really taken advantage of the tax credit.   “”First-time homebuyers, most between the ages of 25 and 45, accounted for about 45 percent of home sales from January through July 2009, according to the National Association of REALTORS®”.


“This is a historic time,” says George Jaramillo, a 35-year-old business analyst in Atlanta, who recently bought three homes, two of them foreclosures. “It’s a great opportunity to make some great gains in the future.” – Realtor.org, Associated Press

Use Tax Credit Down Payment?

In past posts I have mentioned the tax credit, which if not extended will expire by November 30, 2009. This means your transaction must close by this date. Aside from the deadline, also mentioned was using the tax credit as part of your down payment. But who would actually loan you the money and wait for the up to $8,000 repayment by tax refund time?

PHFA (Pennsylvania Housing Finance Agency) has a program called Credit Advance Loan Program (TCA) that will loan you up to $6.000 for use towards a down payment according to Kate Newton, Director of Home-ownership Programs for PHFA.

Even if you miss the tax credit deadline. PHFA has some great programs out there for first time home buyers. Contact your loan officer to discuss.

Read more the details at Realtor.org

http://www.parealtor.org/content/phfa.htm

Additional Tax Credit Info

The Market is Changing

The housing market is changing everyday. As things change a new approach is needed on how to proceed. It is a buyers market, or a sellers? How are the rates? When should I buy? What is the next step in the process . . . etc . . .

Here are some good tips for first time home buyers to get you started. Be conservative and use wisdom in each step you make. Find a good agent that will be patient with you.

Homebuyer Tax Credit Window is Ticking Away

The days and hours are ticking away for the homebuyer tax credit. Have you pick a house? Activity is picking up fast. Keep in mind that you have to approximately October 1, 2009 to get a property under contract with a seller.   It will take approximately 6-8 weeks to close.  A homebuyer needs to close on their home by November 30, 2009 to qualify for the government homebuyer tax credit. Keep in mind there is a holiday in this window and loan officers will not be available during this time. The 6-8 week period is an average processing time as long as things go smoothly. So if you have your eye on that house or are sitting on the fence, jump off and get running. You have about two weeks left.

Additional Tax Credit Info

Remodeled Refrigerator

Well, it was an interesting night this evening. I showed two fun homes. The second not as good as the first. Both ranch and great yards. The second one had a massive master bedroom of 19 X 15. Very cute but needed too much work for the price. It was also somewhat taste specific. Whomever had owned this estate liked wood. The bathroom looked like something you would find in a log cabin. Really it was nice and not too bad. The kitchen was updated at some point (maybe the 70’s to 80’s) and additions made to the home. There was really a lot of wood accents in this place. I had to run and get my camera out of the car (I always try to keep one handy). Ok, so have you ever seen someone cover their refrigerator with wood to match the kitchen. Well there is a first for everything. So funny. . . . . I guess you could called it a remodeled refrigerator. LOL . . .

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Homes are Being Swept Up Quickly

In the last few weeks, I have had some buyers that have not moved quickly and unfortunately lost opportunity for the home of their first choice. The good one’s are going and going fast. Many are getting multiple offers. This describes many average priced properties and but even more so to foreclosed properties.

One of my buyers called and said that they went back to review some of their favorite listings and many of them had the status changed to under contract.  Time is running out for the first time home buyer tax credit and so is the good inventory.

Here is some additional information quoted from Realtor.org regarding foreclosures and that they are disappearing.
“Buyers of foreclosure have to be quick these days. Some houses go under contract fewer than 90 minutes after they are put on the market, says Brad Geisen, founder of Foreclosure.com.

“For every listing that comes out, we have 10 buyers,” says Cesar Dias, an associate with Approved Real Estate Group in Stockton, Calif.

Dias had 15 minutes of fame after introducing foreclosure sales tours last year. Now the tours are defunct because there are not enough homes to show.

“We had a lot of inventory last summer. Now we’re down to 1,500 listings — from more than 5,000,” Dias says.

In Florida, real-estate investment companies, buying in bulk and paying cash, face competition.

Even in the hard-hit Detroit area, bargains are disappearing.

“For a good house that’s not too beat up, in a good neighborhood, there’s no lack of buyers in this market,” says Andy Sakmar, founder of Century 21 Sakmar in Rochester, 20 miles north of the city. “There are a lot fewer of these properties than a year ago, and the super buys get multiple offers.”

Source: CNNMoney.com, Les Christie (08/06/2009)

Home Buyers Don’t Miss the Opportunity For Your $8000

If you are a First Time Home Buyer time is running out. If you desire to take advantage of the First Time Home Buyer tax credit your property must close by December 1, 2009. Buyers should have a signed purchase contract with the seller signed by early October to have plenty of time to close.

For my buyers that need to finance, I always suggest about 6 weeks for closing, especially with inspections. In most “normal” cases that is enough time. I have seen other odd cases where it can take longer and the reasons can vary.

Just recently I was going to close on a home. It was delayed because the buyer for my seller’s home had to close on her house first.  Well, this buyer for the buyer in our transaction lost their financing and had to start all over. When all was said and done, the house closed about two months after it was suppose to and everyone involved was happy.

So consider this with only 6-8 weeks (hoping there are no snags), you need to find that house in the next 2 to 2 1/2 months or sooner. If you are eager to take advantage, hurry. If you are not sure where you stand with your credit, just take that step and talk to you loan officer.  Happy Hunting.

Details on First Time Home Buyer Tax Credit