Time is running out to claim the $8,000 first-time homebuyers tax credit. When it passed earlier this year, part of the economic stimulus package, was a credit for first time home buyers. The credit is good for up to $8,000 or 10% of the purchase price, which ever is less. This credit does not have to be repaid!
However, the buyer needs to close escrow by Dec 1, 2009 in order to qualify. Now there has been talk of an extension but it has not happened yet. I am a firm believer in "better safe than sorry" and I am encouraging people that if they are planning on purchasing a home in the near future, do it now.
Many buyers think they have until November to start looking but the reality is that it can take awhile to close escrow. First they have to find the home they want and submit an offer. Then the offer needs to get accepted, short sales can take months and bank owned foreclosures more than a week. Many buyers quickly realize that well priced properties get snapped up quickly and they are often out bid by cash buyers who do not have to worry about the property appaising. The process can take some time. Once a buyer accomplishes getting an offer accepted then escrow opens. With changes in lending procedures, escrows can easily last 30-45 days, many lasting 60 days or more.
So, if you are considering buying a home, do not wait to start your home search. It can take much longer than you anticipate.
Showing posts with label Homebuyer Tax Credit - Who is eligible?. Show all posts
Showing posts with label Homebuyer Tax Credit - Who is eligible?. Show all posts
Thursday, August 27, 2009
Thursday, May 21, 2009
HUD: Homebuyer Tax Credit Loans Still on Track
Yesterday I posted an update that the tax credit could not be used toward the down payment. It appears that the details are still being worked out but that it will be available. See below..
Daily Real Estate News | May 21, 2009
News reports that the federal government is backing away from its plan to permit eligible borrowers to monetize the first-time homebuyer tax credit are off the mark, a spokesperson for the U.S. Department of Housing and Urban Development says.
"The technical details are still being finalized and will soon be published in a mortgagee letter and posted on our Web site," Lemar Wooley, a HUD spokesperson, told REALTOR® Magazine Wednesday afternoon.
Under the guidance that's under development, state agencies and other HUD-approved entities would be able to provide short-term bridge loans that households could use to help with their downpayment. The loans would be repaid with the proceeds from the households' federal tax credit.
The loans were announced on the opening day of NAR's 2009 Midyear Legislative Meetings in Washington, D.C., last week. In his announcement, HUD Secretary Shaun Donovan said guidance would be issued shortly.
When the guidance is released, it is expected to cover eligible lenders and set parameters for loan terms and repayment.
Source: REALTOR® Magazine Online
Daily Real Estate News | May 21, 2009
News reports that the federal government is backing away from its plan to permit eligible borrowers to monetize the first-time homebuyer tax credit are off the mark, a spokesperson for the U.S. Department of Housing and Urban Development says.
"The technical details are still being finalized and will soon be published in a mortgagee letter and posted on our Web site," Lemar Wooley, a HUD spokesperson, told REALTOR® Magazine Wednesday afternoon.
Under the guidance that's under development, state agencies and other HUD-approved entities would be able to provide short-term bridge loans that households could use to help with their downpayment. The loans would be repaid with the proceeds from the households' federal tax credit.
The loans were announced on the opening day of NAR's 2009 Midyear Legislative Meetings in Washington, D.C., last week. In his announcement, HUD Secretary Shaun Donovan said guidance would be issued shortly.
When the guidance is released, it is expected to cover eligible lenders and set parameters for loan terms and repayment.
Source: REALTOR® Magazine Online
Wednesday, May 20, 2009
Update for Using Tax Credit for Down Payment
Can the $8,000 First-Time Home Buyer Tax Credit for Down Payments on FHA Loans? The Department of Housing and Urban Development (HUD) account last week that first time home buyers would be able to use the $8,000 “first-time home buyer tax credit” for down payments on FHA loans through the use of bridge loans.
The Department of Housing and Urban Development posted the information on their website in HUD Mortgagee Letter 09-15. For some reason they have completely removed the information from their website. People are speculating that the program is on hold because they have decided to make changes to the program.
While no official explanation has been given, it appears that The Department of Housing and Urban Development and the Internal Revenue Service are researching the details of the program, leaving the status unknown for now
The Department of Housing and Urban Development posted the information on their website in HUD Mortgagee Letter 09-15. For some reason they have completely removed the information from their website. People are speculating that the program is on hold because they have decided to make changes to the program.
While no official explanation has been given, it appears that The Department of Housing and Urban Development and the Internal Revenue Service are researching the details of the program, leaving the status unknown for now
Tuesday, March 31, 2009
Home Buyer Tax Credit - Who is eligible?
Who is eligible to claim the tax credit?
First-time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.
What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.
For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
First-time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.
What is the definition of a first-time home buyer?
The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.
For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
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