This is from the NAR website of the current provisions, I suspect that there will be some revisions however for the time being this is a good reference. For home buyers in Ohio, they also want to check out the Ohio Housing Finance Agency's Mortgage Credit Certificate Program, because it can easily triple the amount of Tax Credits a buyer can recieve. Drop me an email and I will glady send any buyer or Realtor information about this program.
FEATURE
Jan 1 - November 30, 2009 Rules as enacted February 2009
November 7 - April 30, 2010 Rules as enacted November 2009
First-time Buyer Amount of Credit
$8000 ($4000 married filing separate)
$8000 ($4000 married filing separate)
First-time Buyer Definition for Eligibility
May not have had an interest in a principal residence for 3 years prior to purchase
Same
Current Homeowner Amount of Credit
No Provision
$6500 ($3250 married filing separate)
Effective Date Current Owner
No Provision
November 7, 2009
Current Homeowner Definition for Eligibility
No Provision
Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years
Termination of Credit
Purchases after November 30, 2009. (Becomes April 30, 2010 on Date of Enactment.)
Purchases after April 30, 2010
Binding Contract Rule
None
So 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.
Income Limits (Note: Increased income limits are effective as of date of enactment of bill)
$75,000 - single, $150,000 - married, Additional $20,000 phase out
$125,000 - single, $225,000 - married, Additional $20,000 phase out
Limitation on Cost of Purchased Home
None
$800,000 November 7, 2009
Purchase by a Dependent
No Provision
Ineligible November 7, 2009
Anti-fraud Rule
None
Purchaser must attach documentation of purchase to tax return
How will this affect the Omaha real estate market? Was this tax credit a good idea? Stay tuned for my follow-up blog post.
I am rebloging this to hear from people that disagree with this proposal. I did post this on the blog itself because out of 173 posts I counted only 8 that disagreed.
Here are my comments, let me know if I am off base.
Because this post was featured in the daily email and I thought the Title was interesting, I stopped by to read the post. As I read thru 173 posts I was surprised to only find 8 posts that I felt disagree with the proposal. Make this #9 that disagree. I support the elimination of the 8,000 credit. While at the same time agreeing with some of the posters that if renewed it should be the greater of the downpayment or a fixed maximum amount. With the tightening loan criteria I see the current stimulus as PAYING PEOPLE TO (that can afford to buy) BUY HOMES. Your proposal continues to do just that and in larger amounts.
I ask everyone that supports this proposal if they support higher taxes and if they support this proposal because they would benefit with more income from sales. People need to ask what is the best for everyone not just themselves.
A lot of real estate agents are speaking as if the door on real estate sales will be slammed shut if the federal tax credit for first-time homebuyers is not extended. And while this opportunity to collect cash has had a very positive effect on sales in the lower price ranges, it really hasn't meant much to sellers with homes valued in excess of $200,000.
My preference is to let this credit just go away. The expiration of the credit could actually lead us back to a true fair market, where buyers buy because they need a house rather than just trying snag a great deal with future profit potential.
I would like to propose an alternative remedy to help sale in all price ranges. My proposal would really create interest in buyers that could really stimulate the market, and it is the only remedy that I have even seen proposed that would actually correct the mistakes of the past.
The solution I am proposing is to make all down payment monies for a personal residence up to and including a cash sale an income tax deduction. Not a refundable credit, just a deduction against income.
This also would encourage buyers with both cash and significant incomes to get back into the market. It would lead us back to the days when more down payment was better, and smaller mortgages would prevent the short position debacle that we are experiencing today.
The higher end market would see an extensive boost in sales, and prices would stabilize. And once again, homeowners will be encouraged to have equity in their homes to cushion them against negative market forces.
So what do you think? A dollar for dollar tax deduction for down payments on a house sounds like a good idea to me!
Just recieved this notification that the new Condo Guidelines are being delayed again. One issue that was of interest to me was how Lenders were suppose to evaluate the Reserve Requirements. On another post here on Active Rain it was said for existing Condominums the guideline would be reserves needed to be funded at 60%. I have seen nothing to confirm that number, hopefully the updates promised by HUD will give the guidance for Lenders.
Implementation of FHA's new policy guidance for condominium project approval and condo unit financing will be delayed until December 7th 2009. The new guidance, to be issued within the next two weeks, will: 1) offer additional leniencies to address the difficult market conditions and 2) augment some portions of FHA Mortgagee Letter 2009-19, providing additional information and clarification.
Until the new guidance takes effect on December 7th, 2009 lenders may continue to use the Spot Loan Approval guidance issued in Mortgagee Letter 1996-41. Further, the site condo and manufactured housing condo project changes that have already been implemented are not affected by this delay.
Dawn, As others have said your post it timely and excellently written. As you said the guidelines presently call for 2 years after Completion date. (no exception per present FNMA guidelines) If a seller is in the position where a mortgage modification that is acceptable to the lender and affordable to the seller it should be considered. This can be a good option for the Lender, the owner and the real estate market if the modification works. However, I hear modifications generally just forestall the inevitable. The owners/sellers have very difficult decisions to make, but they need to understand it is better for them to make the decisions than to make the lender make the decisions.
Hopefully your post will seller facing a difficult decision will contact a professional that understands the options and is willing to work with them.
It should also be noted that I have seen some sellers, realtors and lenders try to coordinate a short sale closing with the purchase of a new property. Unless full and complete disclosure is made to the old lender, new lender, realtors and underwriters, this can create legal problems.
Today I received another call from another homeowner in foreclosure. Burning questions that no one could (or would) answer were pouring out like lava, pent up emotions were finally being released in a meltdown of fear, frustration, sorrow, confusion, anger.
I just listened, acknowledged, and took notes, listening to learn if I would be able to help.
Eventually, in sharing with me, there was some relief from the pressure, and the courage to ask a question about the future arose: "Will I ever be able to buy a home again?"
Yes! As long as you can financially afford it with a steady source of income and a downpayment, YES. You will be able to buy another house in the future. Usually in about two years after a short sale, you will be eligible to purchase a home and get a loan.
If you opt for foreclosure, it will be seven years, but you will still be able to buy another home in the future, based on standards of the lending community as we know it.
A short sale will give the fastest return to loan eligibility. But even a foreclosure does not mean you will never be able to buy a home again.
The future looks better in time. Here's to your future homeownership and to your financial rescue today.
If you feel you have nowhere to turn for answers to your questions about short sales, loan modification and foreclosure, please call. I can point you in the right direction.
$8,000 First Time Home Buyers Tax Credit, ends Dec. 1, 2009.
Up to $14,999 3 to 1 MATCHING GRANT for First Time Home Buyers in Summit County (Not including Akron, Barberton & Cuyahoga Falls).
Call today to learn if you qualify for many other financial programs!
Chirs, Thanks for the mention in your post. I do agree that anyone looking to purchase and take advantage of the $8,000 should step up their house hunting.
On an added note there are additional tax credits from the Ohio Housing Finance Agency. Information and a calculator can be found here. Funds are limited and only available on a first come first serve basis. The OHFA Tax credit ranges from 20-30% of the interest paid on each year on the loan. Borrowers recieve this credit each and every year they owner occupy the home. On a $100,000 purchase the OHFA credits could exceed $30,000.
Any first-time home buyer in the Greater Cleveland and Akron Ohio marketplace is hopefully well aware of that time is running out on the 8K federal tax credit -- you must close on a home by November 30th, 2009.
For those buyers who are either on the fence or are in the middle of trying to negotiate a short sale, time is running out and you need to act now if you wish to take advantage of it.
I am closing a home purchase this coming week for a buyer (not a first time buyer) and this loan/purchase is closing in under 30 days, so when the right folks (agents, lender, title, escrow, inspectors) are involved, it can happen.
If you are still negotiating with a seller of a short sale property, chances are, it's not going to happen. The bank will still have to approve it, as well as the underlying investor.
If you feel you have waited to long, you haven't. If you start the process now, provided you can get pre-approved for a loan, it's not too late and you can still start and complete the process.
The right agent with the right resources will make or break your home purchase so choose your buyer's agent wisely.
If you need an exceptional lender, Tim Bradford with American Midwest Mortgage has more experience and options than any other lender I know for first time home buyers in the Greater Cleveland and Akron Ohio real estate market.
Thank you Jeff for a great presentation about some of the advertising that consumers see daily. Being in the mortgage industry for many years I am still surprised how many consumer believe these ads. With regard to the false or misleading ads, I suspect that these companies are more than willing to pay the fines because of the profits they make on the loans that they write.
ADVERTISING – Those ads that seem too good to be true.
I have been in the mortgage business for 17 + years. I have seen so much advertising when it came to mortgage companies and how many of the ads were misleading or just flat out lies. Those companies advertising low rates that didn't happen. This easily went on from 1992 to 2002. I always wondered why this wasn't regulated as strongly as it should have been. I found out that some of these companies had 100's of complaints, yet they still operated for those 10 years. I think this is misleading and I call it Shark Advertising. It's dangerously misleading, yet it worked for many companies, at the expense of the borrower.
If anyone has noticed, we haven't see as much advertising from mortgage companies or large banks in the last 18 months or so. I am now seeing a few mortgage companies advertise on the radio and as of lately, a few advertise on TV, especially ESPN. The ads are misleading because they appear to make you believe that it's being backed by the government. Has anyone seen a few ads on tv that look like a news update, a spokesperson telling you about government funded programs or that the government is helping in sponsoring these programs. Yet if you read the fine print, it's a mortgage company, disguising this ad very carefully, spinning it as thought the government is putting this out to the public??
I am even seeing this more and more in such places as Facebook. Below are a few that I am seeing on Facebook now.
Here are some ads found on facebook and comcast.net. As you can see, these mortgage companies and or companies that are lead generators, make you think that the government is behind this. Obama hasn't asked homeowners to refinance. The first one on the left, upper left, is from a company called Lower My Bills. They sell leads to other mortgage companies, after they have gathered your information online. Then you have like 4 to 10 lenders call you, sometimes daily.
People on Facebook that give basic information – eye catchers to pull you in.
Here is a loan officer on Facebook that placed this on his Wall, to capture the attention of others. You just need to be aware of what you read. Sure, this can happen, but there are some unknowns not mentioned. And sometimes the loan officer will raise that unknown, so you can't obtain that great rate and get the next best thing. Keeping in mind, it's not always about the Best Rate. How service? Integrity? Educating the borrower? And so much more.... Please read : I want the same deal that my friend receivd... & Mortgage payment vs Interest Rate
Web Sites that are deceiving !!!!
As I explained in this blog post, deceptive web sites, here is a great example above. Doesn't this look like it could come from the USDA themselves? But it isn't. It acts as a lead catcher, catching your info to call you and or sell you about USDA loans or any other type of mortgage loan. No Cost Obligation is mentioned on the site. - We always love to hear about free things, but are they free overall?
Here is a FAVORITE of mine !!!
I am sure many of you have seen this one on tv, FreeCreditReport.com. The commercial announces a free credit report. But at the very end, it says that you need to enroll in their Triple Advantage program.
A free credit report? They have tons of commercials & commercials cost money to display on TV. They also have like 3 to 4 different kinds of commercials and. producing commercials cost money.
Well, I feel like an investigative reporter for the news. I filled out my info online, trying to see what I get. It says that it takes 3 to 5 days for me to obtain these credit reports from the 3 credit agencies. (giving my credit card #) And then there is a button that says, to obtain your 3 reports now, click here. Imagine that, it's asking for $24.95 now. See the 2nd paragraph on the left, highlighted in yellow? It talks about the new Federal Law and I am wondering if that is what they are sending me now, because that is free. But from what I know, you have to go to annual credit report to get the free reports.
Conclusion : Just be very careful of what you read and what says free, when it might not be free. I always have said, someone has to pay for it from some where. Is it you? Is it me who pays for it?
Shopping for mortgages - The Public Image of Advertising that is misleading !!!! - Part 1 of 2
Shopping for mortgages - The Lending Trees of the World (lead generators) - Part 2 of 2
If cash for the down payment is an issue for you and you are looking for funds to make a purchase of a home for your family, you may wish to look at HUD Homes because you can purchase most of them with only $100.00 Down. Also, in most cases HUD will also pay $2,500.00 in your closing costs and you can ask for additional assistance if needed. If you are a first time buyer you will likely also qualify for the $8,000 Federal Incentive. Also, current the OHFA MCC program has funds available for Bank Owned Properties (HUD Owned Properties Qualify) for a 30% Tax Credit. On a $100,000 purchase this could amount to over $30,000 in Federal Income Tax Credits. Give me a call (or send me an eMail) if you have any questions or would like a referal to a Realtor that sells HUD Homes and is familar with these incentives.
Non Occupanying Co-Borrower loans- Kiddie Condo loans
FHA loans have many features that still aren't talked about as much as one would think, because they are still fairly new to more than have of the loan originators out there. Now, some might argue half is very extreme, even though this is my opinion, I will still stick to this statement for many reasons.
As a loan officer with more than 17 years of mortgage experience, the non-occupant co-borrower program is very simple to understand.
FHA will allow a co-signer that is not living in the house to actually be on the mortgage and co-sign for the loan. Keep one important thing in mind, they must be a family member/relative. And this can be great for first time homebuyers. One thing that so many get confused no matter what type of loan they are applying for is that a co-signer with good credit can't overcome the bad credit of the primary borrower. Meaning that the co-signer with good credit can't get you a better priced loan. If the primary borrower still has lower credit scores that don't qualify, then the loan won't happen.
Now keep in mind that this is a lot different when doing a non-occupant co-borrower loan with a conventional mortgage. Unlike the FHA non-occupant co-borrower loans, which the primary doesn't actually need a job, on a conventional program such as this, that primary borrower still needs to qualify with some type of income ratios. And this usually doesn't help. Besides, in most cases, with the pricing hits on a conventional loan, it would be much cheaper doing a FHA loan. Keep this in mind also, back in April of 2008, HUD allowed this on refinances also. A family could help you refinance your property and not live in the property.
Now, for those of you who remember John Belushi in Animal House, what I consider an American Classic back then, this next part my be very important if you have kids about ready to attend college or are attending college.
The FHA non-occupant co-borrower program can also be known as the Kiddie Condo loan. This basically mirrors the same guidelines as what I explained above. It's just another term and another way to help keep your kids college expenses lower. First off, you don't have to buy a condo. It could be a single family dwelling, or a duplex. One thing that I didn't mention above is that you can't have a co-signer on 3 units or 4 units, not unless they are going to live in the property as their primary.
What's appealing about the FHA Kiddie Condo loan is that you could have other students live in the property and that you could receive rent. A great example :
Duplex : Each unit has 3 bedrooms. Rent goes for about $500 a month. Your total mortgage payment, to include mortgage insurance, taxes, and homeowners insurance is $2,250/month.
You have one son in the property who won't be charged rent. That leaves you 5 other tenants at $500/month. That is $2,500/month. That basically covers your mortgage payment and leaves you a little extra for repairs and such. Your son pays less for attending college, and you get a tax right off, and that you are building equity. Please speak to a tax accountant/CPA for details on this.
Key Point to Remember -
Even though a lot of this sounds easy, you still need to work with a loan officer that is up to date on this kind of financing and on FHA loans in general. A good example : you use to be able to have non-occupant co-borrowers even on 3 units and 4 units, up until about a year ago. One more thing to keep in mind, even though these are HUD's guidelines on FHA mortgages, many lenders have lender overlays. That some lenders might not be able to do what I described above. I know one borrower that already ran into this, after many promises upfront.
This is a question every home buyer should ask themselves especially if your Realtor/Agent has not encouraged you to Shop, Compare and Save. Above and beyond the Rate of Interest and Closing Costs, buyers need to keep in mind that one person/house is controlling the entire transaction. Recently, I was dealing with a buyer that was looking at a New Construction home and as part of the transaction the builder had incentive to use the builders lender. The buyer ultimately walked away from the transaction for a number of reasons. One of the reasons was they were feeling pressuredin general. Also the fact that the Seller/Builder was controlling every aspect of the transaction.
Selling the home
Arranging the Financing
Obtaining the Appraisal from one of their chosen Appraisers
Doing the Title Work
Doing the Closing with their affiliated Title Company
Ask yourself if you want checks and balances by not having everyone in the transaction living under the same roof or having affiliated business arrangements with the individuals they deal with.
As far as a history lesson, consider Car Dealers, it is common place for them earn referral income when they arrange the financing for a car buyer. Also with the number of Cars Repossessed, a sales person is encouraged to do everything possible to get the car sold. Ask yourself if you are doing what is in your best interest or what is in the best interest of the Salesman/Dealership.
Here in Ohio, there are laws preventing your Realtor/Agent from receiving income on a per transaction basis from the Lender or Title Company, however via your Realtors ownership of the affiliated business or another indirect ownership thru an Affiliated Business Arrangement, there may be some conflict of interest. This is the reason buyers and sellers sign AfBA Disclosures. If you are asked to sign one of these forms, ask your agent/Realtor to explain to you any financial incentives they receive. If they say there are NONE, ask them if the company they work for tracks the number of referrals they make to AfBA and if these numbers are discussed periodically with their managers.
I know some Agents/Realtors that work to save their clients money via referrals to lenders and Title Companies, however I know others that make those referals with income or profits being their motive. If you agent/Realtor does not encourage you to independently Shop and Compare, do it for yourself. Convenience shopping at times can be good, however at time Convenience Shopping is not a buyers best option.
Information about Financing Options in Northern Ohio as well as information about people, places and events in Northern Ohio. Northern Ohio is a Great Place to live and work.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
A lot of real estate agents are speaking as if the door on real estate sales will be slammed shut if the federal tax credit for first-time homebuyers is not extended. And while this opportunity to collect cash has had a very positive effect on sales in the lower price ranges, it really hasn't meant much to sellers with homes valued in excess of $200,000.
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