The Housing and Recovery Act was signed into law on 30 July 2008. I wanted to send out a few highlights of the benefits and timelines to my customers.
First-time homeowner tax credit: If you have not owned a home within 3 years and earn less than $75,000 then you can qualify for up to $7,500 tax credit. Dates for qualifying include homes closed between April 8, 2008 and June 30, 2009. This is a interest free loan that must be paid back within 15 years. Here is a link with more details.
Property tax deduction for all homeowners: Homeowners who pay property taxes, it increases the standard deduction by $500 for single filers and $1,000 for couples filing jointly.
FHA loan limit: There are maximum amounts for loans that the FHA will insure, and that Fannie Mae and Freddie Mac will guarantee. Those limits were raised temporarily this year. The new law raises limits permanently. FHA limit for the Warner Robins area is $271,050.
FHA miminum downpayment: FHA minimum required downpayment was increased from 3% of purchase price to 3.5%, but this requirement does not go into effect on homes closed before October 1st.
Downpayment assistance: Downpayment assistance for FHA loans will no longer be available on homes that close after October 1st. Family members and non-profit organizations are currenly allowed to contribute to homebuyers 3% downpayment requirement.
Homes facing foreclosure: Many people who have adjustable rate mortgages are having trouble making payments. Also, some people's homes have lost value, making the home worth less than what they currently owe. It encourages lenders to forgive some of their debt so they can refinance at lower amounts into mortgages insured by the Federal Housing Administration, or FHA - making their payments more affordable.