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The Homebuyer
Tax Credits Expired April 30, 2010
Congratulations to everyone who
took advantage of this historic opportunity!
2009 Economic Stimulus Package!
Incentives for First-time Homebuyers & 2009 FHA Updates
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Homebuyer Tax Credit – The bill provides for a $8,000 tax
credit that would be available to first-time home buyers for the
purchase of a principal residence on or after January 1, 2009 and
before December 1, 2009. The credit does not require
repayment. Most of the mechanics of the credit will be the
same as under the 2008 rules: the credit will be claimed on a tax
return to reduce the purchaser's income tax liability. If any
credit amount remains unused, then the unused amount will be
refunded as a check to the purchaser.
Bringing the Dream of Homeownership Within Reach
As part of its plan to stimulate the U.S. housing market and address
the economic challenges facing our nation, Congress has passed
legislation that grants a tax credit of up to $8,000 to first-time
home buyers.
Here is more information about how the 2009 First-Time Home Buyer
Tax Credit can help prospective home buyers become part of the
American dream. |
First-time Homebuyer
includes ANY purchaser who
has not owned a home for
at least three years! |
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First-time homebuyers who purchase a home in 2009 (Jan 1 - Nov 30)
may qualify for a tax credit of up to $8,000 or 10% of the
purchase price, whichever is less.
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It's important to note that a "first-time
homebuyer" has been defined as someone (either spouse if filing
jointly) who has not owned a principle residence for the past three
years prior to the purchase.
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You must own the home for at least 3 years (36
months) in order to avoid a repayment or recapture penalty.
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There are income limitations. In order to qualify for
the full tax credit, a single taxpayer must have a modified
adjusted gross income less than $75,000/year. For married couples, the
limitation is $150,000 or less. If your income exceeds these levels, you
may still qualify for a partial tax credit. Additionally,
married couples who qualify for the first-time tax credit who file
separately, would each claim 5% of the home purchase or up to $4,000
each (whichever is less) on their 2009 tax returns. Consult with your
tax attorney or CPA for specific details.
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Investment properties, rentals and secondary properties
are NOT eligible for the tax credit.
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Co-signers DO work, even if parent owns a home. Income
limit is not clear, but we'll assume $150,000 for combined
occupant/co-signer
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Recapture Provision - If you sell the property within
three years, the ENTIRE amount of the tax credit you received is
recaptured (paid back) at the time of sale. I strongly advise you to
seek advice from your accountant, CPA or the IRS to determine how this
entire tax credit applies to you
The credit decreases for buyers who earn between $75,000
and $95,000 for single buyers and between $150,000 and $170,000 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 $95,000 for singles and over $170,000 for
couples are not eligible for the credit.
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
the three-year period, the credit will be recouped on the sale
Unlike the "Housing and Economic Recovery Act of 2008"
- which was essentially a 15-year interest-free loan of $7,500 - the 2009
Stimulus is a true tax credit. You will not be required to pay
this tax credit back if you live in the house at least 36 months. This
$8,000 tax rebate is good news for
first-time homebuyers who may be sitting on the fence to make the big
move. Prices are low, inventory is plentiful and interest rates on
30-year fixed-rate FHA loans are still at 5%.
Now is the perfect
time to purchase a home in the Denver Metro area! Combine my cash
rebates & incentives along with the US President Obama's stimulus package
and save even more! Visit my Buyer Toolbox or
start
searching for your dream home today!
New FHA Loan Limits in Colorado for 2009
The FHA Loan Limit for
Adams County has Increased to $406,250 - (Denver-Aurora)
The FHA Loan Limit for Arapahoe County has Increased to $406,250 -
(Denver-Aurora)
The FHA Loan Limit for Boulder County has Increased to $460,000 -
(Boulder)
The FHA Loan Limit for Broomfield County has Increased to $406,250 -
(Denver-Aurora)
The FHA Loan Limit for
Denver County has Increased to $406,250 - (Denver-Aurora)
The FHA Loan Limit for Douglas County has Increased to $406,250 -
(Denver-Aurora)
The FHA Loan Limit for
Jefferson County has Increased to $406,250
FHA
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The minimum down payment for FHA loans in 2009 is
3-1/2%.
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HUD Properties listed as FHA "Yes" are NOT always FHA
Insurable (ie: inspection items)
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Foreclosure "ok"...as long as it's been 3 years from
date of PT Deed or date of paid claim
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No seller down payment assistance allowed!
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Seller and/or interested party concessions up to 6% of
sales price
The American Recovery and Reinvestment Act of 2009*
How will these
new increased FHA loan limits effect new home buyers?
The new higher loan limits will allow FHA loans (which require a low
3.5% down payment) to be
available for a greater range of home price options where conventional
loans (requiring 10-20%
down) would normally have been the only available option for financing.
How can FHA help me buy a new home?
FHA insured mortgages offer many benefits that only come with
FHA:
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Easier
to Qualify: Because FHA insures your mortgage, lenders may be more
willing to give you loan terms that make it easier for you to qualify.
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Less
than Perfect Credit: You don't have to have a perfect credit score
to get an FHA mortgage. In fact, even if you have had credit problems,
such as a bankruptcy, it's easier for you to qualify for an FHA loan
than a conventional loan.
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Low
Down Payment: FHA loans have a 3.5% down payment and that money
can come from a family member, employer or charitable organization as
a gift. Other loan programs don't allow this. FHA loans also require
no cash reserves in many cases.
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Costs
Less: FHA loans have competitive interest rates because the
Federal government insures the loans. Always compare an FHA loan with
other loan types.
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Competitive Rates & Terms: Compared with other lower down payment
programs, FHA interest rates are similar. In some cases FHA loans
offer lower overall monthly payments when including its lower cost of
monthly mortgage insurance vs. PMI (Private Mortgage Insurance).
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Non-occupying co-borrowers are allowed: such as family members
that are needed to help you in qualifying for your loan, but won’t
actually be living with you in your new home.
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Helps
You Keep Your Home: The FHA has been around since 1934 and will
continue to be here to protect you. Should you encounter hard times
after buying your home, FHA has many options to help you keep you in
your home and avoid foreclosure.
Who qualifies for FHA financing?
To be eligible for an FHA loan, you must have a valid social
security number and have lawful residency in the United States (US
Citizens, Permanent Resident Aliens, and Non-Permanent Resident Aliens)
and be of a legal age to sign on a mortgage in your state. Lenders will
verify income, assets, liabilities, and credit history for all parties on
the loan. FHA's mortgage programs do not typically have maximum income
limits for qualifying, although you must have sufficient income to qualify
for the mortgage payment and other debts. Income limits may be present
when qualifying for down payment assistance or other secondary financing
programs that may be used in along with an FHA loan.
Is FHA just for First Time Home Buyers?
Although it’s known as a popular first-time homebuyer program,
FHA is not restricted to first-time homebuyers. An FHA loan can be an
excellent choice for anyone buying a new home including buyers who have
used FHA mortgages in the past.
If I’ve had credit problems in the past, will
this hurt my chances of being approved on an FHA loan?
As a general rule of thumb after having credit problems (such as
bankruptcy or foreclosure
in the past), you should be in a situation where you’ve made your payments
on time for at
least the past 12-24 months for an FHA loan.
Can FHA financing be used to purchase second
homes or investment property?
NO. FHA financing may only be used to purchase a primary residence
and is currently not used
for second homes or investment properties.
Can gift funds come from the seller, lender or
other interested party?
The gift donor may not be a person or entity with an interest
in the sale of the property, such
as the seller, real estate agent or broker, builder, or any entity
associated with them. Gifts
from these sources are considered inducements to purchase and must be
subtracted from
the sales price for mortgage calculation purposes.
The
exceptions to this rule are:
1. When parents are the sellers.
2. When the real estate agent is a relative.
Is it acceptable to get a loan for the down payment?
Funds can be
borrowed for the total required investment as long as satisfactory
evidence is
provided that the funds are fully secured by investment accounts or real
property. Such
assets may include stocks, bonds, automobiles, collections, real estate
(other than the
property being purchased), etc.
In addition,
certain types of loans secured against deposited funds, such as signature
loans,
the cash value of life insurance policies, loans secured by 401(k)s, etc.,
in which repayment
may be obtained through extinguishing the asset; do not require
consideration of a
repayment for qualifying purposes. However, in such circumstances, the
asset securing the
loan may not be included as assets to close or otherwise considered as
available to the
borrower.
An independent
third party must provide the borrowed funds. The seller, real estate agent
or
broker, lender, or other interested third party may not provide such
funds. Unacceptable borrowed funds include signature loans, cash advances
on credit cards, borrowing against household goods and furniture and other
similar unsecured financing.
Contact me to
learn more about these new FHA rules and how they can help you get the
home of your dreams. It really has never been a better time to buy a
home. Prices have "corrected" or adjusted to more practical levels &
interest rates are still at historic lows.
*This
information is provided for general awareness only, and is not intended
for the purpose of providing legal, accounting, financial, tax advice or
consulting of any kind. Please consult with your lender for complete
details on any lending program.
OurFirstNewHome.comDown Payment Assistance Programs
Homebuyers, there
are still plenty of State & local programs available to provide down
payment assistance. Contact me or your mortgage broker for current
funding options.
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Colorado Housing & Finance Authority (CHAFA) - 3% of
loan amount
- not limited to first-time homebuyers
- income limits apply
- Adams, Denver, Douglas & Jefferson County = $85k/year (single) &
$97,700 (2 person)
- no purchase price limitations
- $1,000 required investment (this is the minimum amount required from
you)
- no cash back at closing!
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Colorado Housing Assistance Corp - (CHAC)
- Denver & Jefferson County
- income limits apply
- up to $10,000 with three repayment options
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City of Aurora - 5% and closing costs - up to $10,000
- for properties located in the City of Aurora
- income limits apply
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Adams County Housing Authority
- down payment, closing costs & pre-paids
- income limits apply
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March 2009 - 620 FICO score from at least one buyer
required
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