Tax Credit Deadline Extended!... Flood Insurance Program Reinstated!

More details here: http://www.realtor.org/Government_Affairs

Create Your Own Buyer Stimulus Package

The Federal Government's Homebuyer Tax Credit may have expired on April 30, but just because Uncle Sam has turned off the financial spigot aimed at housing doesn't mean home buyers still can't get "something extra" during their purchase... click here for entire article and video.

Military Have Extra Year to Get Home Tax Credit

The government has announced that current military personnel, Foreign Service and Intelligence community members have one more year to get in on the tax credit for first time buyers.
Click here for details.

What's Needed to Claim Tax Credit?

The IRS has clarified which documentation taxpayers need to submit to claim the first-time and move-up homebuyer tax credit.  Read more >

6 Surprising Facts About the Buyer Tax Credit

The homebuyer tax credit is not as simple or straightforward as you might think. Here are some nuances that will affect homebuyers who plan to use it.

• To qualify for the move-up tax credit, a home owner must have occupied the same principal residence for five of the last eight years consecutively.
• Buyers can elect to claim the credit on either their 2009 or their 2010 tax return, whichever is best for them.
• Buyers who claim the credit in 2009 can’t file electronically because the Internal Revenue Service hasn’t put the required forms on line. The wait for a refund is three or four months.
• The home can be a mobile home or travel trailer that is fixed to land owned or leased by the home owner. A mobile home or travel trailer that is actually mobile doesn’t qualify.
• The home can’t be purchased from a close relative, including a parent, spouse, child, grandparent or grandchild.
• A buyer who earns no taxable income or doesn’t owe any federal income tax can qualify for the tax credit and file a tax return just to claim it.

Source: Bankrate.com, Marcie Geffner (01/21/2010)

Read More
Learn the Basics of the Extended Home Buyer Tax Credit

Expanded Tax Credit Offers Big Opportunity

A new April 30 deadline is in place for buyers to take advantage of a federal home-buyer incentive, which now allows certain repeat buyers, as well as first-time buyers, to get a tax break.

In addition to promoting home-buying based on today's lower home prices and historically low interest rates, it is also important to realize that there is no requirement that you sell your current residence at once — or ever.

Continue Reading 'Expanded Tax Credit Offers Big Opportunity'

Home Buyer Tax Credit Extended !!!

In a major victory for NAHB that will boost the fledgling housing recovery and help struggling business owners nationwide, Congress today approved legislation that will extend the first-time home buyer tax credit beyond its Nov. 30 deadline and expand it to a wider group of home buyers. The bill also provides relief to cash-strapped home builders by providing broader tax benefits for businesses with net operating losses (NOLs).

The legislation, which will be signed into law shortly by President Obama, will extend the $8,000 credit for first-time home buyers for sales contracts entered into by April 30, 2010 and closed by June 30. Further, it has been expanded to include a new $6,500 credit for owners of existing homes who are purchasing a new primary residence. An existing home owner can claim the $6,500 tax credit if they have been residing in their primary residence for five consecutive years out of the last eight.

In more good news, the income eligibility limits to claim the full credit amount for both groups of home buyers have been raised from $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return to $125,000 for individuals and $225,000 for married couples. NAHB’s consumer-oriented Web site,www.federalhousingtaxcredit.com, will provide complete details on the enhanced home buyer tax credit after the bill is signed into law by the President.

For NOLs, the new law will allow all businesses -- regardless of size -- with operating losses in 2008 or 2009, not both, to claim refunds on taxes paid up to five years ago. Businesses can offset 100% of taxable income with NOLs carried back in years one through four and offset 50% of income in year five. Small businesses with less than $15 million in gross receipts would be able to claim a five-year carryback for 2008 losses under the American Recovery and Reinvestment Act and for 2009 losses under the new law. The new net operating loss provisions will throw a lifeline to struggling businesses, allowing them to continue making payrolls, paying business loans and otherwise keep their doors open until the economic recovery takes hold.

Last Action on the Home Buyer Tax Credit

Even as Congress neared completion on the legislation, proponents made it perfectly clear that the home buyer tax credit would not be extended when it expires next year. Sen. Johnny Isakson (R-Ga.), a long-time champion of the home buyer tax credit, said: "This is the last extension of the home buyer tax credit. Tax credits like this only work by creating the sense of urgency to take advantage of it, and to bring the market back."

On the floor of the Senate, Finance Committee Chairman Max Baucus (D-Mont.) said that, “It’s important that this tax credit does not become a permanent fixture in the tax code. Our amendment would end the credit on April 30 of next year. This extension would get us through the winter – traditionally the worst season for real estate. Our amendment would jump-start the housing market as it enters the summer months of 2010.” Baucus added that the seven-month extension of the tax credit would be “long enough to encourage home buyers to buy homes, but it’s short enough to remain fiscally responsible.” ...
Joe Robson, 2009 NAHB Chairman

More information on the tax credit and what it means to you:

Changes to the Homebuyer Tax Credit Law
Frequently Asked Questions About the New Bill
In Depth: 2009 First-Time Homebuyer Tax Credit

First-Time Buyer Tax Credit Extension Possible

Congress is considering a measure that would extend the first-time home buyer tax credit and potentially raise the maximum credit to $15,000. Read more...

Tax Credit Guidance for FHA Loans

In his speech at the National Association of REALTORS® Housing Summit on May 12, 2009, US Department of Housing and Urban Development (HUD) Secretary Shaun Donovan announced a program that allows borrowers to use the first-time homebuyer tax credit for a down payment or closing costs on a FHA-insured mortgage. The details of the program were announced in Mortgagee Letter 2009-15. Government entities and instrumentalities of government may provide a second mortgage. Currently, 10 state housing finance agencies (including New Mexico) offer a product buyers can use that will effectively monetize the tax credit for down payment purposes. Get information on New Mexico’s programs at housingnm.org. Read the HUD Mortgagee Letter. For information on FHA contact Jerry Nagy at 202.383.1233, jnagy@realtors.org.

Buyer Tax Credit Loan Guidance Coming Soon

HUD is expected to offer detailed guidance on the federal government's plan to provide short-term loans to borrowers using the First-Time Homebuyer Tax Credit. Read more >

Tax Break Available for New Car Purchases This Year

If you have purchased, or are thinking about purchasing a new vehicle in 2009, take advantage of the temporary tax incentive for the purchase of a new car, light truck, motor home, or motorcycle. The deduction is available for the cost of all state and local sales and excise taxes paid on up to $49,500 of the purchase price. The amount of the deduction is phased out for taxpayers whose modified adjusted gross income is between $125,000 and $135,000 for individual filers and between $250,000 and $260,000 for joint filers. The vehicle must be purchased after Feb. 16 and before Jan. 1, 2010. For more info contact Bob McNamara, 202/383-1268.

WHAT IS THE TAX CREDIT LOAN PROGRAM?

In many instances, the biggest barrier facing first-time homebuyers is saving the money for the down payment and closing costs. Because the federal first-time homebuyer credit can only be claimed after the homebuyer purchases the home, the credit cannot be used to cover the down-payment and closing costs associated with the purchase of a home.Because of the need for down payment and closing cost assistance to purchase a home, MFA has created the “Tax Credit Loan Program”. The Tax Credit Loan Program provides a first-time homebuyer with a loan of 8 percent of the sales price or $6,500, whichever is less, to cover the down payment and closing costs associated with purchasing a home. After loan closing, the homebuyer may file for the federal first-time homebuyer tax credit and use the tax refund to pay off the Tax Credit Loan.As long as the homebuyer pays off the Tax Credit Loan prior to June 30, 2010, the homebuyer will not have to pay any interest on the loan. If the borrower chooses not to pay off the Tax Credit Loan by June 30, 2010, the loan will convert to a 30 year, fixed rate second mortgage that requires a modest monthly payment. The Tax Credit Loan Program is paired with a safe, 30 year fixed rate MFA first mortgage loan, which provides long-term, sustainable homeownership. The Tax Credit Loan Program is available statewide to first-time homebuyers who have not owned a home for the past three years. The program is available through a statewide network of Participating Lenders, which are listed on the back of this fact sheet. The Participating Lender will coordinate the loan process and answer any questions you may have regarding the program.

WHAT IS THE FIRST-TIME HOMEBUYER TAX CREDIT?

In 2008, Congress created the first-time homebuyer tax credit as a method of encouraging new homebuyers to purchase a home. The program provides up to an $8,000 tax credit for first-time homebuyers who purchase a home before December 1, 2009. The homebuyer must live in the home for at least 36 months, or they will be required to repay the tax credit to the IRS. Additional information regarding the federal first-time homebuyer tax credit can be found at www.federalhousingtaxcredit.com

IRS Provides Filing Guidance on First Time Homebuyer Tax Credit

The IRS has released additional information to help homebuyers understand the ways they can file to receive the homebuyer credit. It is important for taxpayers to know that they must complete the purchase and close or take up residence in the case of new construction in order to be eligible to file for the credit. Here are the four main options listed by the IRS: 1) File an extension; 2) File now, amend later; 3) Amend the 2008 tax return; or 4) Claim the credit in 2009 rather than 2008.
There are a number of entities working on ways to advance money to be used for down payment in anticipation of receiving the credit. NAR is working to provide guidance on these options and how they might work. However, there is no legal way to receive the credit itself from the IRS prior to closing since closing on the purchase is a prerequisite to eligibility for the credit. Click here for IRS Release outlining options in more detail.

How the $8k first time homebuyer tax credit works

I have been getting a lot of phone calls on the $8,000 first time homebuyer tax credit. Here is how it works,

New Stimulus Plan Passed
Officially titled the American Reinvestment and Recovery Act of 2009, it is the largest spending free-for-all in history. But does it do anything for housing?There are really only two provisions that address housing. First it allows the temporary increases in conventional loan limits for high cost areas to remain. Secondly, it expands the First Time Homebuyer Tax Credit. The First Time Homebuyer Tax Credit was already in effect last year but was set to expire July 1, 2009. It has now been extended to December 31, 2009. Here is how it works: - Up to an $8,000 tax credit for a first time home buyer that purchases a primary residence. - A “first time home buyer” is someone that has not purchased a home in the past three years but they are allowed to have owned a home prior to that. - There is an income cap of $95,000 for a single filer and $170,000 for those filing jointly (modified adjusted gross income). - You can decide to apply the tax credit to your 2008 return or your 2009 return. - This is not free. You have to pay the money back by getting a smaller refund each year until it is repaid. - There is the ability to Request a Waiver of Requirement to Repay the tax credit if you meet certain conditions and you occupy (not just own) for at least 36 months. - Uncle Sam is not going to be mailing anyone an $8,000 check that buys a home. - State housing loans are now eligible for this program.

It used to be that if you used MFA you could not get the tax credit. The stimulas package now allows people who use MFA to get the tax credit. I am verifying that the local office agrees.

Tax Credit Changes Could Unleash Home Sales

More than half a million additional sales could result from an expanded and improved home buyer incentive. Read more >

2nd Quarter NM Homes Sales
Statewide the number of homes sold is down nearly 28% from 2nd quarter 2007, however, both average and median prices are up from last year. Click here for complete 2nd quarter statistics.

Entry for August 7, 2008
How the New First-Time Buyer Tax Credit Works
Under the new housing bill, home buyers who have not owned a home in the last three years will be eligible for a tax credit. Find out if your buyers qualify. Read more >

Little-Known Loans for Buyers
Federally-sponsored mortgage programs can help borrowers with stable jobs, but no savings. Read more >

Fed Issues Rules to Prevent Abusive Lending
The Federal Reserve has adopted rules to prevent unfair or deceptive practices by lenders and to protect home buyers from the kind of loans that drove many into foreclosure. The new rules apply to all lenders and not just to banks supervised by the Fed. Some of the new rules require lenders to escrow money to pay taxes and insurance for risky borrowers, document borrower's income before a loan is issued, limit and-in some cases-ban prepayment penalties, prohibit lenders from making a loan without considering a borrower's ability to repay a home loan from sources other than the home's value, and require mortgage advertising to contain information about rates, monthly payments, and other features of the loan. Most of the rules are expected to take effect Oct.1, 2009. Escrow requirements won't go into effect until April 1, 2010. The rules do not apply to home equity lines of credit, construction loans, bridge loans, or reverse mortgage loans.

Entry for August 1, 2008
Great News!!
President Bush just signed into law the Housing and Economic Recovery Act of 2008. This is a major victory for REALTORS®, consumers, and our nation. Homebuyers will soon have access to more affordable financing, and first-time homebuyers (those who have not owned a home for three years) will receive a tax-credit to help them enter the market. For more details on all of the provisions in the new law, please use the link below. http://www.realtor.org/gapublic.nsf/pages/hr_3221_key_provisions?OpenDocument

Entry for July 29, 2008
Existing Home Sales Drop Nationally
NAR reports single-family, townhome and condo purchases fell 2.6 percent in June and are down more than 15 percent from the same period last year. Read more >

Foreclosure Activity Continues to Rise
According to RealtyTrac's Q2 2008 U.S. Foreclosure Market Report, New Mexico ranked among the bottom half of the states for its second quarter filings. The report defines foreclosure filings as default notices, auction sale notices and bank repossessions. New Mexico ranked No. 37 among the 50 states, with 1,150 total filings, which is a 2.7 percent decrease from the previous quarter but a 60 percent increase over the second quarter 2007.

FHA Adds Enhancements to FHASecure Initiative
The Federal Housing Administration recently implemented NAR-backed enhancements to the FHASecure Initiative which will give FHA flexibility to insure mortgages for borrowers who were late on some payments or received a principal write-down from their lender. FHASecure gives home owners with non-FHA adjustable rate mortgages the ability to refinance into a FHA-insured mortgage. With the new FHASecure criteria, lenders may voluntarily write down the outstanding subprime mortgage principal balances to a 97 percent or 90 percent LTV ratio depending on the borrowers' circumstances. FHA will also encourage lenders to make other arrangements, such as subordinate financing, to fill the gap between the existing loan balances and the FHA-insurable loan amount. The refinanced loan amount backed by the FHA would be based upon a new appraisal, performed by an FHA-approved appraiser. In February, NAR had sent a letter to the Secretary of Housing and Urban Development recommending many of these enhancements. Questions? Contact Jerome Nagy, 202-383-1233 Entry for July 29, 2008 FHA/GSE Legislation Passes On Monday, the U.S. Senate passed a final bill on FHA and GSE that NAR had long fought for, after deliberations and negotiations for the past few weeks. The House passed the identical bill on Wednesday, July 23. For more information, read the bill summary. The President has said he will sign the legislation into law. This bi-partisan legislation, NAR believes, will aid in calming mortgage markets, strengthen housing markets, and stabilizing our economy. The new loan limits are now set at $625,500 for the GSEs and FHA, as well as a $7,500 home ownership tax credit. The legislation also includes broad GSE Reform, FHA Reform, development of a National Affordable Housing Trust Fund, and creates a new FHA program to help homeowners at risk for foreclosure.
(c) 2008, REALTORS® Association of New Mexico. All rights reserved.2201 Brothers Road, Santa Fe, New Mexico 87505 800-224-2282 Fax: 505-983-8809

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