Last Time about Tax Credit

Bringing the Dream of Homeownership Within Reach

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that: Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.
Here is more information about how the Extended Home Buyer Tax Credit can help prospective home buyers become part of the American dream. If you have specific questions or need additional information, please contact a tax professional or the Internal Revenue Service at 800-829-1040.


Who Qualifies for the Extended Credit?

First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see: 2009 First-Time Home Buyer Tax Credit.


Which Properties Are Eligible?

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.


How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.
The maximum allowable credit for current homeowners is $6,500.
How is a Buyer's Credit Amount Determined?
Each home buyer’s tax credit is determined by two additional factors:
The price of the home.
The buyer's income.

Price
Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income
Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009, single buyers with Incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit. These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?
Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

Homebuyer Tax Credit Extended!

Are you a first time home buyer with income of no more than $75,000 ($150,000 for couples)?

You can still qualify for last year's $8,000 tax break, assuming you are in contract by April 30 and close before July 1.


Owned the same home for at least 5 years?

You can now get $6,500 tax credit if you buy another within the deadline.

House Passes GSE & FHA Loan Limit

House Passes GSE and FHA Loan Limit Increases, Senate to Consider This Week On January 29, 2008, the House of Representatives passed H.R. 5140, the economic stimulus package. This bill, agreed to by the Administration includes several important housing provisions. These include increases in the loan limits for Fannie Mae and Freddie Mac and also FHA. The bipartisan vote of 385-35 demonstrates the overwhelming support for this proposal. The House and the administration view strengthening the housing market as key to improving the national economy. Here is what was included in the package:
The FHA limit will increase to as much as $729,750 in high cost areas (to 125% of local median home prices). This is a one year increase, pending final passage of FHA reform (which passed the House and Senate last year).
The GSE limit will be increased up to $729,750 for one year. Currently Fannie Mae and Freddie Mac are capped at $417,000. It appears that there will be a formula similar to that of FHA, with GSE loan limits increasing to 125% of the local median home price, but not to exceed $729,750. In addition, the package includes a bonus depreciation provision for leasehold improvements. This will allow 50% of the cost of a leasehold improvement placed into service in 2008 to be deducted in 2008. The remainder of the cost of the asset will be amortized over the remaining 38 years of the structure's life. The Senate is expected to consider HR 5140 early this week. Contrary to some media reports, we believe that the GSE and FHA loan limits will both be included in the Senate package. NAR is currently conducting a Call For Action to the Senate, asking for their support of these provisions. If you have not yet responded, please visit www.realtoractioncenter.com to contact your Senators.

Conventional Limit for Jumbo Mortgages

Many of you may already know this, but congress is looking at increase the conventional limits somewhere between $600,000 and $700,000 from its current limit of $417,000. I will let you know when this happens and the new amount.

More good news . . . . . and thanks to those of you who have been trying to get me referrals! I really appreciate it. Marina