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THE HOMEBUYER TAX CREDITS HAVE EXPIRED
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:
& $6500 Homebuyer Tax
Credit FAQ's
>>>>> ARCHIVED INFORMATION PERTAINING TO THE 2008-2009 HOMEBUYER TAX CREDITS <<<<<
Frequently Asked Questions
Homeowner Affordability and Stability Plan
Updated:
2/18/09
Borrowers Who Are
Current
on Their Mortgage Are Asking:
What help is available for borrowers who
stay current on their mortgage payments but have seen their homes
decrease in value?
Under the Homeowner Affordability and Stability Plan,
eligible borrowers who stay current on their mortgages but have been
unable to refinance to lower their interest rates because their
homes have decreased in value, may now have the opportunity to
refinance into a 30 or 15 year, fixed rate loan. Through the
program, Fannie Mae and Freddie Mac will allow the refinancing of
mortgage loans that they hold in their portfolios or that they
placed in mortgage backed securities.
I
owe more than my property is worth, do I still qualify to refinance
under the Homeowner Affordability and Stability Plan?
Eligible loans will now include those where the new first mortgage
(including any refinancing costs) will not exceed 105% of the
current market value of the property. For example, if your property
is worth $200,000 but you owe $210,000 or less you may qualify. The
current value of your property will be determined after you apply to
refinance.
How do I know if I am eligible?
Complete eligibility details will be announced on March
4th when the program starts. The criteria for eligibility will
include having sufficient income to make the new payment and an
acceptable mortgage payment history. The program is limited to loans
held or securitized by Fannie Mae or Freddie Mac.
I have both a first and a second mortgage.
Do I still qualify to refinance under the Homeowner Affordability
and Stability Plan?
As long as the amount due on the first mortgage is less than 105% of
the value of the property, borrowers with more than one mortgage may
be eligible to refinance under the Homeowner Affordability and
Stability Plan. Your eligibility will depend, in part, on agreement
by the lender that has your second mortgage to remain in a second
position, and on your ability to meet the new payment terms on the
first mortgage.
Will refinancing lower my payments?
The objective of the Homeowner Affordability and
Stability Plan is to provide creditworthy borrowers who have shown a
commitment to paying their mortgage with affordable payments that
are sustainable for the life of the loan. Borrowers whose mortgage
interest rates are much higher than the current market rate should
see an immediate reduction in their payments. Borrowers who are
paying interest only, or who have a low introductory rate that will
increase in the future, may not see their current payment go down if
they refinance to a fixed rate. These borrowers, however, could save
a great deal over the life of the loan. When you submit a loan
application, your lender will give you a "Good Faith Estimate" that
includes your new interest rate, mortgage payment and the amount
that you will pay over the life of the loan. Compare this to your
current loan terms. If it is not an improvement, a refinancing may
not be right for you.
What are the interest rate and other terms
of this refinance offer?
The objective of the Homeowner Affordability and
Stability Plan is to provide borrowers with a safe loan program with
a fixed, affordable payment. All loans refinanced under the plan
will have a 30 or 15 year term with a fixed interest rate. The rate
will be based on market rates in effect at the time of the refinance
and any associated points and fees quoted by the lender. Interest
rates may vary across lenders and over time as market rates adjust.
The refinanced loans will have no prepayment penalties or balloon
notes.
Will refinancing reduce the amount that I
owe on my loan?
No. The objective of the Homeowner
Affordability and Stability Plan is to help borrowers refinance into
safer, more affordable fixed rate loans. Refinancing will not reduce
the amount you owe to the first mortgage holder or any other debt
you owe. However, by reducing the interest rate, refinancing should
save you money by reducing the amount of interest that you repay
over the life of the loan.
How do I know if my loan is owned or has
been securitized by Fannie Mae or Freddie Mac?
To determine if your loan is owned or has been
securitized by Fannie Mae or Freddie Mac and is eligible to be
refinanced, you should contact your mortgage lender after March 4,
2009.
When can I apply?
Mortgage lenders will begin accepting applications after
the details of the program are announced on March 4, 2009.
What should I do in the meantime?
You should gather the information that you will need to
provide to your lender after March 4, when the refinance program
becomes available. This includes:
-
information about the gross monthly income of all borrowers,
including your most recent pay stubs if you receive them or
documentation of income you receive from other sources
-
your most recent income tax return
-
information about any second mortgage on the house
-
payments on each of your credit cards if you are carrying balances
from month to month, and
payments on other loans such as student loans and car loans.
Borrowers Who Are at Risk of Foreclosure
Are Asking:
What help is available for borrowers who
are at risk of foreclosure either because they are behind on their
mortgage or are struggling to make the payments?
The Homeowner Affordability and Stability Plan offers
help to borrowers who are already behind on their mortgage payments
or who are struggling to keep their loans current. By providing
mortgage lenders with financial incentives to modify existing first
mortgages, the Treasury hopes to help as many as 3 to 4 million
homeowners avoid foreclosure regardless of who owns or services the
mortgage.
Do I need to be behind on my mortgage
payments to be eligible for a modification?
No. Borrowers who are struggling to stay current on their
mortgage payments may be eligible if their income is not sufficient
to continue to make their mortgage payments and they are at risk of
imminent default. This may be due to several factors, such as a loss
of income, a significant increase in expenses, or an interest rate
that will reset to an unaffordable level.
How do I know if I qualify for a payment
reduction under the Homeowner Affordability and Stability Plan?
In general, you may qualify for a mortgage modification
if (a) you occupy your house as your primary residence; (b) your
monthly mortgage payment is greater than 31% of your monthly gross
income; and (c) your loan is not large enough to exceed current
Fannie Mae and Freddie Mac loan limits. Final eligibility will be
determined by your mortgage lender based on your financial situation
and detailed guidelines that will be available on March 4, 2009.
I do not live in the house that secures the
mortgage I’d like to modify. Is this mortgage eligible for the
Homeowner Affordability and Stability Plan?
No. For example, if you own a house that
you use as a vacation home or that you rent out to tenants, the
mortgage on that house is not eligible. If you used to live in the
home but you moved out, the mortgage is not eligible. Only the
mortgage on your primary residence is eligible. The mortgage lender
will check to see if the dwelling is your primary residence.
I have a mortgage on a duplex. I live in
one unit and rent the other. Will I still be eligible?
Yes. Mortgages on 2, 3 and 4 unit properties are eligible
as long as you live in one unit as your primary residence.
I have two mortgages. Will the Homeowner
Affordability and Stability Plan reduce the payments on both?
Only the first mortgage is eligible for a modification.
I owe more than my house is worth. Will the
Homeowner Affordability and Stability Plan reduce what I owe?
The primary objective of the Homeowner Affordability and
Stability Plan is to help borrowers avoid foreclosure by modifying
troubled loans to achieve a payment the borrower can afford. Lenders
are likely to lower payments mainly by reducing loan interest rates.
However, the program offers incentives for principal reductions and
at your lender’s discretion modifications may include upfront
reductions of loan principal.
I heard the government was providing a
financial incentive to borrowers. Is that true?
Yes. To encourage borrowers who work hard to retain homeownership,
the Homeowner Affordability and Stability Plan provides incentive
payments as a borrower makes timely payments on the modified loan.
The incentive will accrue on a monthly basis and will be applied
directly to reduce your mortgage debt. Borrowers who pay on time for
five years can have up to $5,000 applied to reduce their debt by the
end of that period.
How much will a modification cost me?
There is no cost to borrowers for a modification under
the Homeowner Affordability and Stability Plan. If you wish to get
assistance from a HUD-approved housing counseling agency or are
referred to a counselor as a condition of the modification, you will
not be charged a fee. Borrowers should beware of any organization
that attempts to charge a fee for housing counseling or modification
of a delinquent loan, especially if they require a fee in advance.
Is my lender required to modify my loan?
No. Mortgage lenders participate in the program on a
voluntary basis and loans are evaluated for modification on a
case-by-case basis. But the government is offering substantial
incentives and it is expected that most major lenders will
participate.
I'm already working with my lender /
housing counselor on a loan workout. Can I still be considered for
the Homeowner Affordability and Stability Plan?
Ask your lender or counselor to be considered under the
Homeowner Affordability and Stability Plan.
How do I apply for a modification under the
Homeowner Affordability and Stability Plan?
You may not need to do anything at this time. Most
mortgage lenders will evaluate loans in their portfolio to identify
borrowers who may meet the eligibility criteria. After March 4 they
will send letters to potentially eligible homeowners, a process that
may take several weeks. If you think you qualify for a modification
and do not receive a letter within several weeks, contact your
mortgage servicer or a HUD-approved housing counselor. Please be
aware that servicers and counseling agencies are expected to receive
an extraordinary number of calls about this program.
What should I do in the meantime?
You should gather the information that you will need to
provide to your lender on or after March 4, when the modification
program becomes available. This includes:
-
information about the monthly gross income of your household
including recent pay stubs if you receive them or documentation of
income you receive from other sources
-
your most recent income tax return
-
information about any second mortgage on the house
-
payments on each of your credit cards if you are carrying balances
from month to month, and
payments on other loans such as student loans and car loans.
My loan is scheduled for foreclosure soon.
What should I do?
Contact your mortgage servicer or credit counselor. Many
mortgage lenders have expressed their intention to postpone
foreclosure sales on all mortgages that may qualify for the
modification in order to allow sufficient time to evaluate the
borrower's eligibility.
> 2009 American
Recovery and Reinvestment Act - $8000 & $6500 Homebuyer Tax Credit -
Updated:
11/25/09
> 2009 Economic Stimulus Plans -
$8,000 Tax Rebates Incentives for First-time Homebuyers
>
2009 FHA Changes & Down Payment Assistance
>
2009 Economic Stimulus Package Overview -
Updated:
2/17/09
> Homebuyer & Homeowner Stimulus
Package -
Released
2/6/09
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