As of 1 day ago, both the Senate and the House have voted to extend and expand the $8000 homebuyer tax credit!  What does this mean?  It means that first time homebuyers have until April 30, 2010 to get under contract to buy a home.  It also means that if you have lived in your home for 5 consecutive years out of the past 8, you can get a $6500 tax credit when you purchase a new home.  Congress also increased the income limits which is great.  See more details below:

Who Qualifies for the Extended Credit?

First-time home buyers who purchase homes between the date the bill is signed by President Obama and April 30, 2010.  Current home owners purchasing a home between the date the bill is signed by President Obama and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.  To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.If you or your client purchased a home between January 1, 2009 and the date the bill is signed by President Obama.  

Which Properties Are Eligible?

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.  The maximum credit allowed for current homeowners is $6,500.

How is a Buyer’s Credit Amount Determined?

Each home buyer’s tax credit is determined by two additional factors: The price of the home & the buyer’s income.

Price:  Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income:  Under the Extended Home Buyer Tax Credit which is effective on the date the bill is signed by President Obama single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.  These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?  Yes, some buyers may still be eligible for the credit.  The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly.  The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close. 

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

On June 14, 2009 at 13:00 PM, you are invited to an Open House at 13107 Glenmeadow Court in Midlothian. If you are looking for a Resale - single family property in this area, don’t miss this rare opportunity to visit this magnificent property. For a preview of this Resale - single family property, check out my site at erinbarton.com. Please do not hesitate to Contact Me if you have any questions or wish to schedule a private showing.

So it all feels like a dream now, the prospect of actually using the $8000 tax credit as a down payment to help first time homebuyers, who have to come up with a downpayment by December 1st to even take advantage of the credit, is no longer.  What?  you say, we just heard about it last week, how could it already be gone?  Well, it appears the powers that be spoke too soon and forgot to get the Government’s ok on the deal.  The backpedaling started almost immediately after the announcement on May 12th.  Although the initial reaction to the prospect of “monetizing” the tax credit was positive, some organizations objected.  The 2 main objections were (1) the tax credit was created to help with savings, not to provide more debt for people; and (2) the program was too similar to seller-assisted downpayment assistance, which was outlawed last year as one of the great contributors to the foreclosure crisis.   There were also concerns about the tax implications and complications for the IRS.  So, the feds have reversed themselves and buyers will no longer be able to use the tax credit up front as a downpayment.  That leaves buyers with the least expensive option to get into a home, coming up with a 3.5% downpayment.

Tax Credit Can Be Used for Down Payment
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.

Previously, most buyers wouldn’t receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.

“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says. His remarks came in an address to several thousand REALTORS® gathered Tuesday morning at “The Real Estate Summit: Advancing the U.S. Economy,” at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C..

He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

Carytown was one of the first places my husband (then boyfriend) took me when I visited him at Virginia Commonwealth University.  We went to movies at The Byrd Theater every weekend for $1 (its $2 now), making sure we hit the show with Len Lundy playing the organ.  We would eat at Coppola’s Deli and then go window shopping.  He even bought my engagement ring at Schwarzchild Jewelers on Cary Street.  Today, now that we live here again, I still take my family to Galaxy Diner, movies at The Byrd, and we still need our Carytown Burger’s and Fries fix!  Carytown is not only a tourist attraction, but a local hangout as well.  That is why I know I was not the only local whose heart swelled with pride when I heard that our own Carytown was voted #9 out of the top 10 best neighborhoods for shopping by the readers of Southern Living Magazine. (Click here to read the article.)  We even beat out Georgetown in Washington D.C.!  Richmonders know that Carytown is the epitome of boutique shopping, upscale restaurants, and history (The Byrd Theater).  In addition to everyday shopping, Carytown is also the place of area film festivals, the Watermelon Festival, food & wine festivals, and our own ball drop on New Years Eve.  Its also a great place to bring the family or go people watching from one of the many restaurants offering outdoor dining.  As corny as it may sound, I am sure most Richmonders would agree that Carytown may be #9 in the country, but its #1 in our hearts!

River Road Baptist Church child care center, in Henrico county, was named the best in the nation.  The school opened in 1972 and has had the same director for 20 years.  The center has approximately 330 children ages 10 months through 5 yrs old.  The center has a Spanish music program and after-class activities like cooking and science.  Way to go Richmond!

I’m sure many of you have heard in the news that there are new mortgage loan limits for FHA and Conforming loans.  But what in the world does all that mean?  Actually, this change is very significant for anyone looking to buy a home, current homeowners, and the housing market overall.

What are FHA Loans?

FHA loans are government insured loans, which takes some of the default risk off of lenders when buyers put down less than a 20% downpayment. FHA loans are attractive to homebuyers because buyers only need a 3% downpayment and sellers can contribute up to 6% in closing costs.  In many cases credit scores are not considered and allowable debt rations are higher than conventional loans.  A buyer can also get a FHA loan within 2 years of a bankruptcy or foreclosure.  There is no income limit for the borrower and interest rates are comparable to conventional loans.

Why doesn’t everyone get an FHA Loan?

FHA loans became less desirable in the 1990’s when rising home prices went above the FHA loan limits of approximately $250,000.  FHA loans also used to require a home be in very good condition with certain repairs made.

So What Changed?

In an effort to jump start the housing market, Congress increased the loan limits for FHA loans.  In our area, a buyer can now get an FHA loan for approximately $500,000 (lower in the city of Richmond).  Buyers with less than stellar credit or with little cash for downpayment can now get a loan without paying a much higher interest rate.  The government hopes that as more buyers get approved and buy, the housing inventory will eventually go down.  This is also an effort to prevent buyers from being forced to get subprime loans with outrageous interest rates which often end in foreclosure.

I already own a home, What does this mean for me?

Current homeowners can refinance into an FHA loan.  This will help you if you need to cash some equity out or are struggling to make payments with a high interest rate.  It will really help people who have adjustable rate mortgages get into a 30 year fixed mortgage and avoid a huge jump in their interest rates.

The most important part of these changes passed by Congress is that they are currently only good through December 2008!  Congress could extend them, but we don’t know.  As I’ve been saying, now is a great time to buy!  Call me if you want more information on what this could all mean for you!

On March 16, 2008 at 14:00 PM, you are invited to an Open House at 1507 Hawkins Wood Circle in Midlothian. If you are looking for a Single-family property in this area, don’t miss this rare opportunity to visit this magnificent property. For a preview of this Single-family property, check out my site at erinbarton.com. Please do not hesitate to Contact Me if you have any questions or wish to schedule a private showing.

Check out this new property that I just posted on my Web site. It is at 13513 Orchid Lane in Chesterfield. This property has 4 bedrooms and 2 baths. Beautiful Pinehurst plan with 3000 sq feet of living space. Open and flowing plan with great room, dining room, kitchen and sunroom all on first level. Master bedrm with large bath down and three additional bedrooms up along with fantastic lofted playroom. Extras - April-Aire & Rinnai hot water system - Guardian built in Generator, shed, oversized deck and dogrun on .6acre lot with home situated well off street. Great setting!
.

Check out this new Single-family property that I just posted on my Web site. It is at 3789 Donovan Mill Court in Powhatan. This Single-family property has 4 bedrooms and 2 baths. Great value in an incredible neighborhood! Fresh paint thru out and new hardwood on first floor with new maintenance free laminate in kitchen, spacious family room with gas fireplace and ceiling fans, and four big bedrooms with new carpet and paint. The master bedroom has an office/sitting room alcove, with walk in closet, separate shower and tub and double vanity in master bath. Fourth bedroom could make for a great media room, it s huge! You will love entertaining on the screened in porch, and relaxing in the hot tub. Two car garage with wide paved driveway and room for boat/RV, two plus acres on a level lot with lots of landscaping and invisible fencing for the pets. The attic has flooring and shelving for plenty of storage. Quality built home that shows like new!
.