Last Fall Congress approved the Extended Home Buyer Tax Credit. This extended the deadline for the First-Time Home Buyer Tax Credit from Nov. 30, 2009, to April 30, 2010, and expanded it to include repeat buyers
• What’s the deadline?
To qualify, first-time and repeat buyers must have a binding written contract by April 30 and close by July 1.
How much money is available?
The maximum allowable credit for first-time home buyers is $8,000. The maximum for repeat buyers, also referred to in the legislation as “long-time residents,” is $6,500.
• What 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 do buyers get the benefit?
Buyers can apply the credit to their 2009 tax return, filed on or before April 15, 2010; file an amended 2009 return; or apply the credit on their 2010 return, filed on or before April 15, 2011.
• Who qualifies?
To qualify as a first-time home buyer, the purchaser or his or her spouse may not have owned a residence during the three years prior to the purchase. To qualify as a repeat buyer, current home owners must have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.
• Are there income limits?
The new law raises the income limits for people who purchase homes after Nov. 6, 2009. The full credit will be available to taxpayers with modified adjusted gross incomes up to $125,000, or $225,000 for joint filers. Those with MAGI between $125,000 and $145,000—or $225,000 and $245,000 for joint filers—are eligible for a reduced credit. Those with higher incomes do not qualify.

• 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.

How is a Buyer’s Credit Amount Determined?

Each home buyer’s tax credit is determined by two additional factors:

1. The price of the home.
2. The buyer’s income

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.

For a detailed explanation of the Tax Credit:

http://www.realtor.org/home_buyers_and_sellers/2009_first_time_home_buyer_tax_credit

RE/MAX Agents Know the New 2009-2010 Tax Credit

-First-time homebuyers (defined as buyers who have not owned a home in the last three years) are eligible for a tax credit of up to $8,000. New to the package is an incentive for existing homeowners who’ve been at their current residence for at least five years. They will now be eligible for a credit of up to $6,500.

-The income limit has been increased. Previously, a single taxpayer could not have a modified adjusted gross income (MAGI) above $75,000 to claim the full credit, and up to $90,000 for a partial credit. Those limits have been raised considerably to $125,00 and $145,000, respectively. In addition, married couples can now qualify with a MAGI of between $225,000 and $245,000.

-Eligibility for the new program is for homes purchased after Nov. 6, 2009 and before May 1, 2010. However, home purchases subject to a binding sales contract by April 30, 2010 will still qualify provided that the closing occurs prior to July 1, 2010.

Proponents are hopeful that the extension will help the real estate market continue its recent surge in momentum. Moody’s estimates that the program will have helped trigger an additional 400,000 sales from its inception in February 2009 through the end of November. If you have any questions regarding the new tax credit, please feel free to contact me.

The $8,000 first time homebuyer tax credit it set to expire on November 30th, 2009.  That leaves you with limited time to find a home before it is too late.  It is strongly suggested that you enter into contract prior to October 25th if you wish to close before the tax credit expires, as it could take lenders anywhere from 30-50 days to close a loan.  Click the above “time is running out” link to read more and find out if you qualify for this amazing opportunity!!

• The temporary credit is only available for home purchases made from Jan. 1, 2009 to before Dec. 1, 2009 and is equal to 10 percent of the cost of the home, up to a maximum credit of $8,000. (For example, a home purchased for $80,000 or more would qualify for the full $8,000 credit while a $70,000 home would only qualify for 10 percent, or $7,000).
• Buyers claim the credit on their federal tax return to reduce their tax liability. If the credit is more than the taxes owed, the buyer will get a refund check for the difference.
• Only first-time homebuyers can take advantage of the tax credit. A first-time buyer is defined under the tax credit as an individual who has not owned a home in the last three years. Eligible properties include anything that will be used as a principal single-family residence – including condos and townhouses.
• There are income guidelines on the credit. Individuals with an adjusted gross income up to $75,000 (or $150,000 if filing jointly) are eligible for the full tax credit. The credit is phased down for those earning more and is not available for those with an income above $95,000 (or $170,000 if filing jointly).
• The new tax credit does not have to be repaid if the buyer stays in the home at least three years. But if the home is sold before that, the entire amount of the credit is recaptured on the sale.
• People who purchased homes under last year’s $7,500 tax credit will still be required to repay that credit to the government over a 15-year period.
• The latest economic stimulus package also reinstates higher loan limits on the popular Federal Housing Administration (FHA) loans as well as conforming mortgage loans through Fannie Mae or Freddie Mac until the end of 2009. Loan limits had dropped in some markets at the beginning of 2009, but the economic stimulus plan temporarily raises them, giving people more buying power when looking for a home.

Call Jennifer and she will meet with you for a buyer consultation. She will help you determine:

• How much you can afford
• How much money you will need for a down payment

Then she will:

• Set up a search in the MLS with your new home requirements
• Look at the homes
• Write an offer
• Complete a Home Inspection
• Close!

 THIS IS THE BEST BUYESR MARKET IN 35 YEARS!

Rates area at an all time low. there is HUGE inventory and

unbelievable prices on homes that are ON SALE!

You can reach Jennifer at 847-582-9325, or email her at Jennifer@DeborahCassidy.com

Before this becomes official Fha will have to issue a mortgagee letter to approved Fha lenders. The $8,000 will be issued as a temporary bridge loan, and will have to be approved by the end lenders.

I will keep you posted on any updates to this news.

Daily Real Estate News  |  May 12, 2009  |    Share

Tax Credit Can Be Used for Down Payment
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.Previously, most buyers wouldn’t receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change. “We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says. His remarks came in an address to several thousand REALTORS® gathered Tuesday morning at “The Real Estate Summit: Advancing the U.S. Economy,” at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C..He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.Other Solutions for Today’s MarketDuring his address at the summit, Donovan went on to say that the Obama administration plans to further stabilize the housing market. “I do think we have some early signs that the market overall is stabilizing,” Donovan says. “Since January we’ve seen both home sales moving up and down around a relatively stable number and we are seeing the first signs that the rapid decline in home prices is starting to abate.”

It looks like Congress is going to pass a modification to the existing first-time home buyer tax credit instead.  Currently, the credit is for first-time home buyers (or buyers who haven’t owned a home in the past 3 years) for an amount of $7,500 that must be repayed as an interest-free loan over the course of 15 years.  The new modification will provide an $8,000 tax credit for first time home buyers for homes purchased between January 1 and December 1, 2009.  This credit does NOT have to be repaid.  The tax credit phases out for individuals earning more than $75,000 and couples earning more than $150,000.

 Both the Senate and House are expected to vote today on the entire stimulus package.

For more information about the stimulus package:

http://www.cnbc.com/id/29181656