The following has been approved by Congress and is expected to be signed in Obama early this week. While the majority of the $800 billion dollars will not stimulate the economy, this should have a direct impact on the housing economy and get things headed in the right direction.
FIRST-TIME HOMEBUYER TAX CREDIT
As Modified in the American Recovery and Reinvestment Act
Major Modifications Shaded
February 2009
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FEATURE
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CREDIT AS CREATED JULY 2008
APPLIES TO ALL QUALIFIED PURCHASES ON OR AFTER APRIL 9, 2008
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REVISED CREDIT -
EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009
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Amount of Credit
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Lesser of 10 percent of cost of home or $7500
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Maximum credit amount increased to $8000
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Eligible Property
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Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence.
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No change
All principal residences eligible.
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Refundable
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Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser.
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No change
Purchasers will continue to receive refund for unused amount when tax return is filed.
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Income Limit
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Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000).
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No change
Same income limits continue to apply.
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First-time Homebuyer Only
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Yes. Purchaser (and purchaser's spouse) may not have owned a principal residence in 3 years previous to purchase.
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No change
Still available for first-time purchasers only. Three-year rule continues to apply.
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Revenue Bond Financing
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No credit allowed if home financed with state/local bond funding.
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Purchasers who utilize revenue bond financing can use credit.
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Repayment
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Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing.
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No repayment for purchases on or after January 1, 2009 and before December 1, 2009
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Recapture
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If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale.
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If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.
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Termination
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July 1, 2009
(But note program changes for 2009)
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December 1, 2009
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Effective Date
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Purchases on or after April 9, 2008 and before January 1, 2009. Repayment to begin for 2010 tax year.
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All revisions are effective as of January 1, 2009
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With low rates, reduced values, and this tax credit; it truly is a good time to buy. You will not know when the bottom of the market has hit until it has already passed. Foreclosures will continue through 2009 and 2010, but it is I believe banks and the Feds will continue to work with these homeowners. Confidence will be restored and the economy will begin to rebound in 2009.
For all your purchase and refinance needs, feel free to contact me at 410-248-1762 or bob.lowery@prosperitymortgage.com.
Bob Lowery, Mortgage Consultant
Prosperity Mortgage Company
410.248.1762 Tel
443.653.1720 Mobile
Bob.Lowery@prosperitymortgage.com
;)
;)
You have to admit it seems like a good time to buy if you have the cash and the credit. Rates are low, prices are bottoming out, and now $8000 incentive. I just wonder how many first time buyers will have the credit rating and down payment to take advantage of the offer.