We now have two days, yes, 2 days until the home buying tax credit is no longer available for first time buyers and move-up buyers.  It’s been (and still is) a very fun opportunity to work with all those making a move to cash in on what seems to be one of very few tangible benefits (of the government stimulus package) for the American tax payer.  Accepted contracts dated by 4/30 qualify (with an eligible buyer).  Those still hanging around for final signature/dates after Friday will be out of luck.

Early this month we had A Lot of words flying around the real estate and mortgage industry indicating that the USDA Rural Housing funds would be dried up by the end of April.  On April 20th we received an update regarding the remaining funds.  Based on the memo there was still $1,546,902,245.82 available for purchase transactions.  This year’s fiscal allocation started with $13.5 billion.  The 11.45% remaining funds allocated for purchases give us a little room to breathe this month.  Obviously those funds will dwindle rapidly as the tax credit contracts close escrow in the next two months, but it doesn’t fully rule out the possibility of making an offer on a home in the next week or two with the intentions of using the USDA program.  However, please note that it will be very important to have a back up plan in the event that the well runs dry and we have no possibility of obtaining the USDA guarantee (your next best bet will be the FHA program).

I’m here as an advocate for you real estate financing.  As a loan officer at Landmark Mortgage I have the ability to position you into the right program at the right time with the right rate.  Please feel free to give me a call (503.585.1105) or shoot me an email with questions regarding your financing needs.

President Obama signed the Worker, Homeownership, and Business Assistance Act of 2009.  The act extended the tax credit for first time homebuyers for contracts written before May 1, 2010.  The sale must fund prior to July 1, 2010.  The act also expanded the tax credit for existing homeowners who have owned and occupied their primary residence for at least 5 of the last 8 years.  Surprisingly this expansion is effective at time of enactment which is today November 6, 2009.  That’s a real nice surprise for anybody who is closing in the month of November and fits into that category!

Below are two helpful resources for further detail of the act:

Tax Credit Changes (NAR Government Affairs)

Detailed of certain provisions of the Worker, Homeownership and Business Assistance Act of 2009

The digital/internet press is heating up as we close in on the November 30th deadline to close a purchase and qualify for the FTHB tax credit.  In the office we’re slammed with purchase transactions that are heading for a mid-November closing and we couldn’t be more blessed.  However, there are still a good portion of our qualified borrowers who have yet to find a home.  We’ve heard both positive and negative news recently regarding an potential extension of the tax credit.

Yesterday I read the article, “Washington Report: $8,000 Home Buyer Tax Credit” which stated that President Obama, House speaker Nancy Pelosi and Senate majority leader Harry Reid met this past week to discuss a possible extension for military personnel serving overseas and that Reid is in support of a full extension and possible expansion of the tax credit.

Today I read an article, “Push on to expand $8,000 tax credit” from cnnmoney.com stating again that congress is considering an extension of the tax credit.

The tax credit is costly.  There are definite pros and cons for extending the credit.  Bottom line, we’re still seeing a rise in unemployment which results in increased mortgage defaults.  If the tax credit can help qualified buyers move towards homeownership we will all benefit from having the inventory of foreclosed homes shrink in 2010.

The “American Recovery and Reinvestment Act” updated the first-time homebuyer tax credit.  After rumors processed through the mill about a potential increase to $15,000, the Act came clear with the facts of the increased tax credit.  The tax credit for 2008 was $7,500 and will have to be paid back to the federal government beginning in 2010 or 2011 depending on when the credit was claimed.  The updated tax credit was increased to $8,000 and will not have to be repaid if the home is owned for three years.

This is an exciting opportunity for first-time homebuyers in 2009 and a frustration for those that purchased in 2008.  I hope to see some of my clients take advantage of this “gift” from our government.

For details contact me today and click on the PDF from realtor.org updated-first-time-homebuyer-tax-credit

Today the US Senate advances the new Stimulus Bill which includes an increase in the current home buyer tax credit.  Currently a home buyer purchasing a home from April 2008 to July 2009 may be entitled to a tax credit up to $7,500.  Currently the credit is to be paid back in increments of $500 each year thereafter.  The new Stimulus Bill proposes an actual tax credit of 10% of the sales price with a maximum of $15,000.  This provision may rid of the requirement to repay the credit, making it a true benefit for the home buyer.

In the article Senate Advances Tax Breaks for Homebuyers, Senator Johnny Isakson said,

“We do have a history in this country with housing and it goes back to the crash of 1974, which actually in terms of inventory and price declines was comparable to what’s happening now”.

“Within one year of the inception of that tax credit, two-thirds of the available inventory that was on the market was gone. The market moved back to a balanced inventory, values stabilized and things became very healthy. The only reason I know all of that is I was selling houses in 1974, that’s what I was doing to feed my family and make a living.”

The Stimulus Bill that was passed by the house last week will be reconciled with the Bill passed today and may have a final approval as early as Thursday February 5th.

Stay tuned for more information regarding this tax break.  Rates are still great and inventory is beginning to move again!