Friday the St. Petersburg Times stated that Governor Christ signed a bill to allow for the First Time Homebuyer Credit to be used as down payment and I am getting numerous emails regarding the details so I wanted to take a moment and update everyone.
FHA announced today that it will allow the First Time Homebuyer Tax Credit of 8,000 to be used for down payment ONLY ABOVE the FHA required down payment of 3.5% of sales price or the credit can be used towards closing costs. This means that the Buyer would still need a 3.5% down payment from their own funds or from a gift. Today’s announcement does NOT allow the Buyer to use the First Time Homebuyer Tax Credit as the 3.5%. This credit will assist our Buyers with payment for closing costs or the additional deposit which could help the Buyer to qualify for a lower loan amount. There are still details to work out in the mortgage industry before any lender can underwrite and close on this type of transaction.
At this time there is NO program that would allow for the First Time Homebuyer Tax Credit to be used for down payment on a conventional loan. We will keep you updated. Although the Governor signed a bill we do not have any specifics nor information on what State program will be used to work with the tax credit as down payment.
For most of our market area the maximum FHA loan amount is $292,500. If you want to take advantage of this option and have 3.5% saved or can get a gift from an approved source and want to write a contract, at this time my suggestion would be to write the contract for a closing of 90 days. We do not have all the procedures finalized by FHA inorder to close the loan.
Remember, a first time home buyer is someone who has not owned a home in 3 years, not just a first timer!
GOP Plan Aims to Expand Home Buyer Tax Credits
By Renae Merle
Washington Post Staff Writer
Wednesday, March 25, 2009;
House Republican leaders plan to unveil a housing package today that would increase the tax credits available for home buyers and would direct law enforcement to crack down on mortgage fraud.
Under the proposal, borrowers refinancing their mortgage would be eligible for $5,000 to help cover closing costs or to reduce their principal balance. The plan also revives a $15,000 home buyer tax credit proposal that Republicans pushed last year. This time, the proposal would require the borrower to have at least a 5 percent down payment.
Both programs would expire in July 2010.
”We want to make sure responsible homeowners are able to purchase homes and stay in their homes,” said House Minority Whip Eric Cantor (R-Va.), who will introduce the legislation. “If you can get a $15,000 tax credit, that is a tremendous incentive to get qualified buyers back into the game.”
Currently the home buyer tax credit is 8,000 if you purchase a home before 12/31/2009
Should you buy now? Discounts look favorable in Tampa Housing Market-2009
Here’s a column from today’s St. Petersburg Times: It’s actually the most cut and dry, easy to understand article that I’ve seen. It explains all the ways you can use today’s Tampa Real Estate Market, Low Interest Rates and the National Home Buyer Tax Credit to your advantage.
It’s a terrible time to buy a home, the naysayers claim. They cite the uncertain job market, the threat of further home price declines, the plundering of retirement accounts. At the risk of raining brimstone on my head, I’ll take the opposite view.
Home buyers enjoy three discounts that might not survive 2009: a foreclosure discount, a tax credit discount and an interest rate discount.
Let’s start with a typical $180,000, three-bedroom, two-bath home for sale in almost any city or suburb around the region.
Foreclosure houses — repossessed by the bank or soon to arrive at that dismal destination — have been selling for about 75 percent of the price of regular homes. The market is rich with such bargains. So let’s take 25 percent — or $45,000 — off the top of that $180,000 home. That makes $135,000.
Clearwater Yacht Club
We’ll move on to the $8,000 federal tax credit for first-time home buyers. The government defines that as someone who hasn’t owned a primary residence in the past three years. And the beauty of the tax credit is that you won’t have to pay it back, if you stay in the home for 3 years
But to get the $8,000 you have to buy a house by December 2009. Take that $8,000 off the $135,000. We’re down to $127,000. So far, so good.
We still haven’t added in the interest discount. Rates have fallen to historic lows. This week you could get a 30-year fixed mortgage for about 5.2 percent, as long as your credit’s good and your job pays enough. That’s a point lower than rates from 2006, when Tampa Bay area home prices peaked.
Economists predict rates will rise next year as the economy recovers. Shaving off that point saves you about $1,000 a year on your loan. Assume you’ll live in the house six years. That’s close to the average stay in these parts. That’s an additional $6,000 to subtract. So that’s $180,000, minus $45,000 for the foreclosure discount, minus $8,000 for the tax credit discount, minus $6,000 for the interest rate discount.
Our home price is down to $121,000, a tad below the Tampa Bay area’s median sales price for January. Not a bad deal.
February 27, 2009 | Permalink
The only catch I feel; according to the article is coming up with 10% down to do conventional financing. You can always ask the seller’s to pay for a portion of closing costs and prepaid items, however banks have their limit as to how much a seller is allowed to contribute.
An FHA approved home or condo only requires 3.5% down, which I think is a better option for some home buyers who may be purchasing their first home.
If you are in the market to buy a home we would be happy to help you find the best neighborhoods in the Tampa Bay Area. Email: realtyrae@yahoo.com with the subject: buyer’s agent.
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GREAT NEWS!!!!
We are now able to use last year’s maximum loan limits on FHA which in Hillsborough, Pasco & Pinellas is $292,500
(much better than the &$271,050 we were rolled back to).
Don’t forget about the 8,000 tax credit for home buyers. This is not just first time home buyers, it is for anyone who hasn’t owned a home for the past 3 years. This program will expire at the end of 2009.
If you are looking for a Real Estate Agent in the Tampa Bay area, please give us a call:
The American Recovery and Reinvestment Act of 2009
ENHANCED HOME BUYER CREDIT
Who Qualifies?: Anyone who has not owned a home for the preceding three years. That means you may still qualify for the incentive even if you and your spouse owned a home more than three years ago.
How Much?: The incentive calls for a credit of ten percent of the purchase price up to a maximum of $8,000 for a single resident or a married couple filing jointly.
Are There Limits?: The credit is phased-out based on your modified adjusted gross income (MAGI).
How Does It Work?: The tax credit reduces a your tax bill or increases your refund, dollar for dollar. It is fully refundable, meaning that the credit will be paid out to you, even if you owe no tax or the credit is more than the tax that you owe. Even better, there is no repayment requirements associated with this incentive if you keep your home for at least three years.
What are the valid dates to purchase a home?: The incentive is for homes that close between January 1, 2009 and November 30, 2009.
Principal Residences: The tax credit is available for purchases of principal residences. Purchases of vacation homes and rental property are not eligible.
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To request more information on how to purchase a home using the new home buyer tax credit send an email to: info@thetamparealestateinsider.com
*This information is provided for general awareness only, and is not intended for the purpose of providing legal, accounting, tax advice or consulting of any kind. Please consult with your tax professional for complete details.
If you’ve been on the fence about buying a home in the Tampa Bay area; you’ll want to read this news article about interest rates.
It’s hard to believe in today’s economic environment, but the overall Bond market, including Mortgage Bonds, are contending with the “I” word this morning…inflation…thanks to Fed member Frederic “Uncle Freddy” Mishkin.
Mishkin appeared on CNBC this morning, saying that “inflation could come to the forefront given all of the government programs”, and “once the economy recovers, liquidity must be taken out of the markets”…meaning, the Fed may need to rapidly hike rates down the road to control the potential of inflation.
Although rates are very attractive now, the picture may be quite different as we head towards the summer. Oil prices may be on the rise as we approach the summer driving season, some of the economic stimulus might begin to take hold, corporate cost-cutting measures could start to bear fruit, and the big enchilada…the Fed will no longer be a buyer of Mortgage Bonds. These are all ingredients in a recipe that will undoubtedly result in significantly higher interest rates this summer.
…… this wonderful opportunity at hand will not last forever.
We will be holding our next Tampa Real Estate Meetup Investor group, on Feb. 11th, 2009. We will address many current market conditions in the lending industry
Click here to see details
The frequently asked question about the new federal tax credit for first time home buyers is “does it have to be repaid”? The answer isn’t exactly a cut and dry and yes or no.
What the government has defined as a first time home buyer is misleading in my opinion. It’s actually a big bonus because it really isn’t just for first time homebuyers.
What is the definition of a first-time home buyer?
The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase.
For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit.
Find out details of NEW Tax Credit updated as of Feb. 2009
When you are ready to search for a home in the Tampa Bay Area visit our website! You can search homes for sale anywhere in Pinellas, Pasco and Hillsborough Counties. Save your favorite properties and schedule showings.
For questions you may contact us via email or call 813-784-7744.
Down Payment Assistance could mean buying a home with no money down. One of the biggest struggles with first time home buyers is coming up with the down payment and closing costs associated with buying a home.
The AmeriDream Downpayment Assistance Program was created to overcome the greatest barrier to homeownership, the downpayment. The program provides an opportunity for qualified low to moderate income individuals and families to purchase affordable homes by receiving money for the downpayment on a home.
Homebuyers never have to repay the gift from AmeriDream. The program has helped over 250,000 qualified homebuyers become homeowners. AmeriDream is recognized as the most trusted and valued name in gift assistance.
Thousands of homebuyers a month purchase their own homes using The AmeriDream Downpayment Gift Program, which provides down payment assistance of up to 10 percent of the home’s price.
How It Works
- Contact a qualified real estate professional and qualified mortgage professional in your area if you are not already working with one.
- Contact a lender and get a pre-approval letter for a loan that accepts gifts from AmeriDream.
- Choose a real estate professional and begin your home search
- Find the home you’d like to purchase
- Make an offer on the home
Once the contract is ratified, your lender will submit a gift application on your behalf to AmeriDream. The Homebuyer will receive a notice of gift approval from AmeriDream.
Lenders and real estate professionals will explain the home buying process to buyers, as well as the AmeriDream’s Downpayment Gift Program.
Buyers will need to be qualified for a loan that accepts gift funds, such as an FHA or conventional loan. Interested homebuyers should contact a lender or a real estate professional to begin the down payment assistance process.
Take advantage of the Tampa Real Estate Market! Now is the time to buy a home. Learn how you too can become a homeowner through the AmeriDream Downpayment Gift Program.
Feel free to
email or call us 813-784-7744
Rae Catanese and Michelle Jordan
