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First Time New Home Buyers- Earn up to $7500 Tax Credit

September 17th, 2008 Categories: Real Estate News

New Housing Bill Offers Relief To Many: Tax Credit/Interest Free Loan for 1st Time Buyers, Help for Up To 400,000 Underwater Borrowers and some assistance to the elderly and returning veterans.

The most comprehensive housing bill since the great depression signed July 30 with little fanfare. The election year politics of this Democratic sponsored bill made the President sign it, despite objections, without a lot of celebration or publicity. A 700 page bill, this is the first of atleast two parts about the bill, in outline form only- Get your specifics from the appropriate expert, OK? Still it is quite a bill.

First Time Home owners are eligible for a 10% Tax credit on a new home purchase, up to $7500, for homes purchased after April 9 of this year.

This is credit that will have to be repaid over 15 years, so it amounts to an interest free loan. For example, a first time a big thumbs up home buyer buys his/her first home, as a primary residence in September for $150,000. After figuring their taxes, they are happy to see they are getting a 1500 check back… then they hear about the Tax Credit, and find they can get a 10% Credit, up to $7500, so they fill out the forms and get the credit and now their check is 7500 + 1500, or $9000. That is an economic stimulus! But the credit has to be repaid over 15 years, or 600 per year… here is some of the fine print:

The house must be purchased between April 9, 2008 and July 1, 2009. The credit phases out for those earning above $75,000 per year (150K on a joint return) — the idea is to help get some of the unoccupied homes bought and off the market quickly. The credit amounts to a 15 year interest free loan to the first time home buyer. Not bad.

HOPE For Homeowners- Mortgage Assistance- Both Lenders and Borrowers must agree to this FHA Re-finance- designed to keep more homeowners in their homes… it looks like a win/win for many

Here is some of the fine print on the mortgage assistance-

Who qualifies? Borrowers must live in the home, and the mortgage must have been originated on or before Jan. 1, 2008. Borrowers must demonstrate they can’t afford the mortgage and certify that they have not intentionally defaulted. Monthly mortgage payments, including principal, interest, taxes and insurance, must be at least 31 percent of monthly income, as of March 1, 2008.

And the lenders, their requirements? Lenders must agree to take a loss comprising the difference between the mortgage balance and 90 percent of the home’s current value. Lenders also must make an upfront payment to FHA amounting to 3 percent of the principal, to get out of the loan.

More Details: All loans will be 30-year, fixed-rate mortgages and made through FHA-approved lenders. A borrower can choose to refinance through a different lender. Borrowers’ income must be deemed sufficient to cover the new loan. They must provide verification of income ( a novel approach) and cannot have any additional mortgage debt, such as a home-equity loan. And if you sell or re-fi in the first year at a profit, 100% of the profit goes to the FHA, this transitions to 50% if you sell after 5 years.

How to apply for this? Find an FHA friendly lender, like Olan Carder, and get started.

I’ll post more about this Housing Bill in the next few days– there is help for veterans who may be in default, the elderly to get lower fee reverse mortgages, community block grants to revitalize foreclosed homes and provide affordable housing.

As much as we like to complain about a do-nothing Congress they did Something here– is it enough? Probably not, there are some who need help who won’t qualify… will there be unintended consequences? Probably so. Can we argue about the proper role of government? Yes, in the abstract, but today, housing is in a crisis throughout the nation, and something had to be done. For all its flaws, never the less it is a good start towards solving the housing crisis in America today- and most provisions sunset themselves, a noteworthy advance in government policy.

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It is a strong buyers market here in the greater Charlotte area, Lake Wylie, Lake Norman, the whole area for new homes and re-sales. We work with Buyers and Sellers every day. You can quickly compare area prices with the links below, or just give me, Terry, a call at 704-351-1519. I am a Charlotte broker specializing in relocations, 2nd homes–buying and selling real estate of all kinds- and will represent only you.

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First Time New Home Buyers- Earn up to $7500 Tax Credit

New Housing Bill Offers Relief To Many: Tax Credit/Interest Free Loan for 1st Time Buyers, Help for Up To 400,000 Underwater Borrowers and some assistance to the elderly and returning veterans.

First Time Home owners are eligible for a 10% Tax credit on a new home purchase, up to $7500, for homes purchased after April 9 of this year.

HOPE For Homeowners- Mortgage Assistance- Both Lenders and Borrowers must agree to this FHA Re-finance- designed to keep more homeowners in their homes… it looks like a win/win for many

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