Earlier today I received an update from the President of McCue Mortgage, Bill McCue, on the Stimulus package that the House and Senate have come to agreement on, and expected to be signed by President Oboma some time today. This update was mainly on the Tax Credit which has been in place for almost a year and has now been altered by new legislation.
The legislation that was finally agreed upon has be significantly altered from what I posted ten days ago. As in my previous blog I am going to just concentrate on the Tax Credit portion of the legislation at this time, and will give further updates on other parts of it at a later date.
- The tax credit is only for first time buyers just as defined in the past.
- The credit is increased from $7,500 to $8,000.
- The credit is no longer an interest free loan. No repayment is required now.
- The credit is now available to Connecticut Housing Finance Authority (CHFA) borrowers.
- The new credit will be effective as of 01/01/09
- The new credit will end on 12/01/09
- The $15,000 Tax Credit that was part of the senate version of the bill is now gone.
The previous Tax Credit will continue to apply to all First Time Homebuyer that purchase between April 8, 2008 and December 31, 2008. First Time Homebuyers who closed on their home beginning January 1, 2009 will be eligible for the new Tax Credit until December 31, 2009. For example, a CHFA loan that closed on 12/31/08 gets no tax credit but one that closed the next day gets the new credit. A market rate borrower who closed on 12/31/08 gets a $7,500 interest free loan while one that closed the next day gets an $8,000 tax credit with no repayment required. I’m sure this will make some people unhappy. Remember nobody has to take the tax credit.
I hope to post another update when we have a better understanding of what the new FHA loan limits will be, the maximums have gone up a little, but not to the limits that had been hoped for. The new limits are not an across the board increase, they are county by county, and not all counties will see a change.
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Info about the author:
George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
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George, Nice comprehensive summary with easy to follow rules, sounds like all first time buyers closing within the first 11 months of this year get an $8000 bonus!