Congress has extended and expanded the homebuyer tax credit to include home buyers who have lived in their existing principal residence consecutively for 5 of the last 8 years.

Highlights

First Time Home Buyers can still receive an $8,000 ($4000 married filing seperate) tax credit for homes purchased between December 1, 2009  - April 30, 2010

Current Homeowners can receive a $6500 ($3250 married filing seperate) tax credit for new home purchases provided that they have used their home sold or being sold as a principal residence consecutively for 5 of the previous 8 years.

Credits terminate for purchases after April 30, 2010.  Unless there is a written binding contract to purchase a home is in effect prior to April 30, 2010.  The purchases would have until July 1, 2010 to close.

Income limits: $125,000 single, $225,000 married

Limitation on cost of Home is set at $800,000

All purchasers ust attach documentation to purchace on their tax return.

For a side by side chart comparison between the 2 tax credits please see below link courtesy of the National Association of Realtors http://www.realtor.org/fedistrk.nsf/files/government_affairs_tax_credit_ext_chart_110409.pdf/$FILE/government_affairs_tax_credit_ext_chart_110409.pdf

Chelsea in June 2008 Average Listing Price was $252,700

Chelsea in June 2009 Average Listing Price is  $277,600

The sales figures for June, reported by the Ann Arbor Area Board of REALTORS®, show

some stable market activity with increased in sales prices in Ann Arbor, Ypsilanti, Whitmore Lake and

Saline.  On a national level, pending home sales show a sustained upward trend, rising for four

consecutive months with very favorable housing affordability and a first-time buyer tax credit boosting

activity. "Lawrence Yun, NAR chief economist, cautions that there could be delays in the number of

contracts that go to closing. "Closed existing-home sales have improved but are coming in

lower than expected because some contracts are delayed or falling through from the

application of new appraisal rules for many transactions," he said. "Rises in contract activity

show buyers are becoming more active even as they face much more stringent loan

underwriting standards. Speedy clarification of the appraisal rules could smooth a housing

market recovery and support the overall economy."  This is good news I wish the rules would have been

clarified sooner, May and June closing were definately affected about the new appraisal rules and

guidelines.

The Federal Housing Administration (FHA) will allow homebuyers to apply the new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. This is a fabulous step to further stabilize the housing market by stimulating home sales.

The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Previously families could only access this credit after filing their tax returns with the IRS. Now FHA's rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. Families will now be able to apply their anticipated tax credit toward their home purchase right away. This will help in two ways it will allow families to purchase their first home but most importantly it will benefit local communities by reducing the amount of inventory and will stabelize home prices.

Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment.  However lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower's own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. This will help homebuyers because it will allow them to shop for the best home price and services using their anticipated tax credit.

For those of you interested in the complete list that contains both pet food and human food subject to recall since January 2009 relating to peanut products recalled by Peanut Corporation of America.   

http://www.accessdata.fda.gov/scripts/peanutbutterrecall/PeanutButterProducts2009.pdf

HUD announced on January 14, 2009 their latest efforts to prevent foreclosure by launching their "Keep Your Home, Know Your Loan" campaign which will kick off in Chicago, Detroit, Los Angeles, Miami, New York and Phoenix.  For more information click http://www.hud.gov/news/release.cfm?content=pr09-005.cfm

This is a call to action to help families in risk of losing their homes.  If you are at risk of losing your home call (877) HUD-1515

#1 Myth Sellers Are Desperate;  Really only 1 in 10 sellers are desperate.  Yes a seller who is being relocated will be more desperate than others.  The other 9 sellers may be sellers who are selling to move down to a smaller home due to kids moving away or even sellers who are selling to move up due to a growing family.  Really each sellers circumstance are different and unless you really know or ask what their reason for selling is,  it doesn't necessarily mean they are desperate just because they are trying to sell their home.

#2 Myth Stupid to Buy Before Prices Have Bottomed Out;  Truth is that home prices have been stable for 18+ months.  Not to say that some homes are not continuing to drop this is really a very small percent of available homes on the market.  Prices on foreclosed homes will continue to fall until the house sells.  Every 30 days a bank owned home will be reduced until it sells.  The fact of the matter is that when prices will start to rise they will rise very quickly.  When that happens it is almost always too late because demand will increase immediately and most homes will be picked over at the point.

#3 Myth Today Buyers Need 20% Down To Get A Loan; Truth is FHA only requires 3 1/2 % down.  Sellers can even pay the 3 1/2 % buyers closing costs.  Yes these loan will require PMI but it is such a little amount usually only 1% of the loan.  With today's low rates in the mid to low 5% that still is a very affordable loan.

#4 Myth It's The Worse Time To Sell;  Truth is that this really depends on where you live.  Some markets like Phoenix, San Diego & Detroit are on the upswing.  The bonus is that if you are selling to move up to a larger home you are going to more than make up for the losses you may realize on your home sale.

#5 Myth Shop Around for Best Rate;  Truth is your current lender will most likely give you the best deal because they don't want to loose you as a customer try them 1st.  Also your local mortgage broker knows the availability of specific loan programs in your area.  It is important that you compare interest rate, APR and closing costs not just rates with each lender. 

With all the foreclosed properties in the area.  Which almost always need some for of work.  Whether it be just paint and carpeting or the larger projects like replacing kitchens, bathrooms, roof replacement, replacing appliances and furnaces.  I though some of you might be interested in learning about FHA's 203K Rehab Loans.

http://www.hud.gov/offices/hsg/sfh/203k/203kmenu.cfm

Stunning home located on quiet cul de sac in gorgeous Inverness Woods. Home is loaded with updates throughout including hardwood flooring, ceramic tile, lighting, coved archways, cabinetry, master suite with cathedral ceilings, large walk-in closet, gorgeous double vanity master bath with separate tub & shower, full walkout basement is plumbed for full bath. Gorgeous wooded lot backs to Inverness golf course and features rock retaining walls, brick paver patio, walking trails thru woods and path to Golf Course right out the back yard.

Good News

Residential Home Sales are up 7.3% over October 2007.  Chelsea, Saline and Ypsilanti are showing the most gains according to the Ann Arbor Area Board of Realtors.

Condo sales are up 31% for the region compared to October 2007 numbers.

In Ann Arbor alone the residential sales price is up 8% over October 2007 numbers.

What does this mean?  It means that inventory is shrinking, homes are being priced correctly and incentives are finally driving sales in an upward direction.

In October 2007 the average sale price of a home in Ann Arbor was $306,580 in October 2008 the average home price is $330,804.

What does this mean for the rest of us?  Homes will start to show an increase in surrounding communities next.