2009-2010 Homebuyer Tax Credit Extension
Updated: 11/25/09

The Worker, Homeownership, and Business Assistance Act of 2009 has extended the tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence as well as a tax credit of up to $6,500 for qualified repeat home buyers.  Click the links below for info on the new program:

• $8,000 First-Time Homebuyer Tax Credit & $8000 Homebuyer Tax Credit FAQ's

• $6,500 Homebuyer Tax Credit & $6500 Homebuyer Tax Credit FAQ's

 

 

 

>>>>> ARCHIVED INFORMATION PERTAINING TO THE 2008-2009 HOMEBUYER TAX CREDITS <<<<<
2009 Economic Stimulus Package!
Incentives for First-time Homebuyers & 2009 FHA Updates

President Obama signed off on the 2009 Economic Stimulus Package in Denver, Colorado today. Specific to real estate, a few details from the plan include:

• First-time homebuyers who purchase a home in 2009 (Jan 1 - Nov 30) may qualify for a tax credit of up to $8,000 or 10% of the purchase price, whichever is less.
   

• It's important to note that a "first-time homebuyer" has been defined as someone (either spouse if filing jointly) who has not owned a principle residence for the past three years prior to the purchase.
   

• You must own the home for at least 3 years (36 months) in order to avoid a repayment or recapture penalty.
   

• Click here for First-time Homebuyer Tax Credit - Frequently Asked Questions
   

• There are income limitations.  In order to qualify for the full tax credit, a single taxpayer must have a modified adjusted gross income less than $75,000/year.  For married couples, the limitation is $150,000 or less. If your income exceeds these levels, you may still qualify for a partial tax credit.  Additionally, married couples who qualify for the first-time tax credit who file separately, would each claim 5% of the home purchase or up to $4,000 each (whichever is less) on their 2009 tax returns.  Consult with your tax attorney or CPA for specific details.
   

• Investment properties, rentals and secondary properties are NOT eligible for the tax credit.
   

• Co-signers DO work, even if parent owns a home. Income limit is not clear, but we'll assume $150,000 for combined occupant/co-signer
   

• Recapture Provision - If you sell the property within three years, the ENTIRE amount of the tax credit you received is recaptured (paid back) at the time of sale.  I strongly advise you to seek advice from your accountant, CPA or the IRS to determine how this entire tax credit applies to you
   

• Click here for First-time Homebuyer Tax Credit Frequently Asked Questions

Unlike the "Housing and Economic Recovery Act of 2008" - which was essentially a 15-year interest-free loan of $7,500 - the 2009 Stimulus is a true tax credit.  You will not be required to pay this tax credit back if you live in the house at least 36 months.  This $8,000 tax rebate is good news for first-time homebuyers who may be sitting on the fence to make the big move.  Prices are low, inventory is plentiful and interest rates on 30-year fixed-rate FHA loans are still at 5%.  Now is the perfect time to purchase a home in the Denver Metro area!  Combine my cash rebates & incentives along with the US President Obama's stimulus package and save even more!  Visit my Buyer Toolbox or start searching for your dream home today!

 

New FHA Loan Limits in Colorado for 2009

The FHA Loan Limit for Adams County has Increased to $406,250 - (Denver-Aurora)
The FHA Loan Limit for Arapahoe County has Increased to $406,250 - (Denver-Aurora)
The FHA Loan Limit for Boulder County has Increased to $460,000 - (Boulder)
The FHA Loan Limit for Broomfield County has Increased to $406,250 - (Denver-Aurora)
The FHA Loan Limit for Denver County has Increased to $406,250 - (Denver-Aurora)
The FHA Loan Limit for Douglas County has Increased to $406,250 - (Denver-Aurora)
The FHA Loan Limit for Jefferson County has Increased to $406,250

FHA

• The minimum down payment for FHA loans in 2009 is 3-1/2%.

• HUD Properties listed as FHA "Yes" are NOT always FHA Insurable (ie: inspection items)

• Foreclosure "ok"...as long as it's been 3 years from date of PT Deed or date of paid claim

• No seller down payment assistance allowed!

• Seller and/or interested party concessions up to 6% of sales price

The American Recovery and Reinvestment Act of 2009*

How will these new increased FHA loan limits effect new home buyers?
The new higher loan limits will allow FHA loans (which require a low 3.5% down payment) to be
available for a greater range of home price options where conventional loans (requiring 10-20%
down) would normally have been the only available option for financing.

How can FHA help me buy a new home?
FHA insured mortgages offer many benefits that only come with FHA:

• Easier to Qualify: Because FHA insures your mortgage, lenders may be more willing to give you loan terms that make it easier for you to qualify.

• Less than Perfect Credit: You don't have to have a perfect credit score to get an FHA mortgage. In fact, even if you have had credit problems, such as a bankruptcy, it's easier for you to qualify for an FHA loan than a conventional loan.

• Low Down Payment: FHA loans have a 3.5% down payment and that money can come from a family member, employer or charitable organization as a gift. Other loan programs don't allow this. FHA loans also require no cash reserves in many cases.

• Costs Less: FHA loans have competitive interest rates because the Federal government insures the loans. Always compare an FHA loan with other loan types.

• Competitive Rates & Terms: Compared with other lower down payment programs, FHA interest rates are similar. In some cases FHA loans offer lower overall monthly payments when including its lower cost of monthly mortgage insurance vs. PMI (Private Mortgage Insurance).

• Non-occupying co-borrowers are allowed: such as family members that are needed to help you in qualifying for your loan, but won’t actually be living with you in your new home.

• Helps You Keep Your Home: The FHA has been around since 1934 and will continue to be here to protect you. Should you encounter hard times after buying your home, FHA has many options to help you keep you in your home and avoid foreclosure.

Who qualifies for FHA financing?
To be eligible for an FHA loan, you must have a valid social security number and have lawful residency in the United States (US Citizens, Permanent Resident Aliens, and Non-Permanent Resident Aliens) and be of a legal age to sign on a mortgage in your state.  Lenders will verify income, assets, liabilities, and credit history for all parties on the loan. FHA's mortgage programs do not typically have maximum income limits for qualifying, although you must have sufficient income to qualify for the mortgage payment and other debts. Income limits may be present when qualifying for down payment assistance or other secondary financing programs that may be used in along with an FHA loan.

Is FHA just for First Time Home Buyers?
Although it’s known as a popular first-time homebuyer program, FHA is not restricted to first-time homebuyers. An FHA loan can be an excellent choice for anyone buying a new home including buyers who have used FHA mortgages in the past.

If I’ve had credit problems in the past, will this hurt my chances of being approved on an FHA loan?
As a general rule of thumb after having credit problems (such as bankruptcy or foreclosure
in the past), you should be in a situation where you’ve made your payments on time for at
least the past 12-24 months for an FHA loan.

Can FHA financing be used to purchase second homes or investment property?
NO. FHA financing may only be used to purchase a primary residence and is currently not used
for second homes or investment properties.

Can gift funds come from the seller, lender or other interested party?
The gift donor may not be a person or entity with an interest in the sale of the property, such
as the seller, real estate agent or broker, builder, or any entity associated with them. Gifts
from these sources are considered inducements to purchase and must be subtracted from
the sales price for mortgage calculation purposes.

The exceptions to this rule are:
1. When parents are the sellers.
2. When the real estate agent is a relative.
Is it acceptable to get a loan for the down payment?

Funds can be borrowed for the total required investment as long as satisfactory evidence is
provided that the funds are fully secured by investment accounts or real property. Such
assets may include stocks, bonds, automobiles, collections, real estate (other than the
property being purchased), etc.

In addition, certain types of loans secured against deposited funds, such as signature loans,
the cash value of life insurance policies, loans secured by 401(k)s, etc., in which repayment
may be obtained through extinguishing the asset; do not require consideration of a
repayment for qualifying purposes. However, in such circumstances, the asset securing the
loan may not be included as assets to close or otherwise considered as available to the
borrower.

An independent third party must provide the borrowed funds. The seller, real estate agent or
broker, lender, or other interested third party may not provide such funds.  Unacceptable borrowed funds include signature loans, cash advances on credit cards, borrowing against household goods and furniture and other similar unsecured financing.

Contact me to learn more about these new FHA rules and how they can help you get the home of your dreams. It really has never been a better time to buy a home.  Prices have "corrected" or adjusted to more practical levels & interest rates are still at historic lows.

*This information is provided for general awareness only, and is not intended for the purpose of providing legal, accounting, financial, tax advice or consulting of any kind. Please consult with your lender for complete details on any lending program.

 

Down Payment Assistance Programs
Homebuyers, there are still plenty of State & local programs available to provide down payment assistance.  Contact me or your mortgage broker for current funding options.

• Colorado Housing & Finance Authority (CHAFA) - 3% of loan amount
  - not limited to first-time homebuyers
  - income limits apply
  - Adams, Denver, Douglas & Jefferson County = $85k/year (single) & $97,700 (2 person)
  - no purchase price limitations
  - $1,000 required investment (this is the minimum amount required from you)
  - no cash back at closing!

• Colorado Housing Assistance Corp - (CHAC)
  - Denver & Jefferson County
  - income limits apply
  - up to $10,000 with three repayment options

• City of Aurora - 5% and closing costs - up to $10,000
  - for properties located in the City of Aurora
  - income limits apply

• Adams County Housing Authority
  - down payment, closing costs & pre-paids
  - income limits apply

• March 2009 - 620 FICO score from at least one buyer  required

• a 10% drop in housing prices is wiped out by a 1/2% interest rate hike!

• Denver Metro is rated as the #2 recovering housing market in the nation.

• FHA financing only requires a 3.5% down payment & $100 down on HUD homes!

• Denver Metro area home inventory is down nearly 40% from the same time last year.

• First-time homebuyer includes ANY purchaser who has not owned a home for at least three years.