News for Dacula, GA - Friday November 6th, 2009 12:36pm
More Homebuyers Qualify for Tax Credit

Ann Arbor, MI November 6, 2009 — Congress just passed an expanded version of the $8,000 first time home buyer tax credit that was set to expire on November 30. "The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules," said Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. "Although the tax credit remains at $8,000 for home buyers that have not owned a primary residence in the last three years, it has been expanded to include a $6,500 tax credit for home buyers that have lived in their current primary residence for at least five consecutive years out of the past eight years. Under the old rules, move-up home buyers did not qualify." Consider these three examples:

Example 1:
Jane purchased a home in 2002, lived there for 5 years as her primary home, moved out in 2007, and turned that home into a rental property. If Jane decides to buy a new primary residence today, she would qualify for the $6,500 tax credit based on the fact that she lived in the same residence as her primary home for at least five consecutive years out of the past eight.

Example 2:
Harry purchased a home in 2004, and lived there for the past 5 years as his primary home. If Harry decides to buy a new primary residence today, he would qualify for the $6,500 tax credit based on the fact that he lived in the same residence as his primary home for at least five consecutive years out of the past eight.

Example 3:
Nicole purchased a home in 2006, and lived there for the past 3 years as her primary home. If Nicole decides to buy a new primary residence today, she would not qualify for the $6,500 tax credit based on the fact that she did not live in the same residence as her primary home for at least five consecutive years out of the past eight.

The tax credit applies to homes purchased for less than $800,000 before May 1, 2010. "If you sign a binding contract to purchase a home before May 1st, you would need to close on the transaction before July 1, 2010," Nicholas said. "It works kind of like a gift certificate that can be redeemed for cash. You simply file a form with the IRS right after you buy your home, and the IRS will send you a check for the full amount of your credit."

The income limitation for single tax payers went up from $75,000 under the old rules to $125,000 under the new rules. For married tax payers, the income limitation went up from $150,000 to $225,000. "This means that more people will qualify for the credit — especially in parts of the country with higher costs of living," Nicholas said. "This should help stimulate parts of the housing market that may not have been impacted by the old version of the credit."

There are many creative ways of structuring your home purchase transaction in ways that maximize the benefits of the credit. Here are a few examples:
- The credit applies to 1-4 unit homes as long as you live in one of the units as your primary residence — you could live in one unit and rent out the others
- If two unmarried individuals buy a home, and only one of the individuals qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit. (Note: In the case of married couples, both spouses must qualify for the credit.)
- The credit applies even if you have co-signers on your mortgage loan

Home buyers who work with "John Rackley", a Certified Mortgage Planning Specialist are much better equipped to save money and navigate the complexities of the tax credit. Please visit http://www.cmpsinstitute.org/public/profile/2968


About CMPS Institute: CMPS is a training, examination, certification and ongoing membership program for financial professionals who provide mortgage and real estate equity advice. Recognized for its preeminence within the industry, the CMPS curriculum represents the core knowledge expected of residential mortgage advisors regardless of the diversity of specializations within the industry. Over 5,500 financial professionals have gone through the program since its launch in 2005.

First time homebuyer tax credit. - Thursday November 5th, 2009 8:59am
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Erate says Interest rates boosted tax-credit useRushing to escrow to take advantage of the waning federal first-time home buyer tax credit?

Relax.

If you miss the Nov. 30 deadline, you'll likely get a reprieve.

An extension and expansion of the popular tax credit is expected to give both new and move-up buyers a tax incentive to buy a home until at least April 30, 2010, longer for military personnel.

And it could come as early as this week.

An overwhelming 85 to 2 roll call vote in the U.S. Senate this week to cut off debate on the first-time home buyer tax credit measure and others pretty much seals the deal on legislation President Obama has already agreed to sign.

If passed into law, the new tax credit would extend the existing credit for first-time homebuyers, worth up to $8,000, and offer a new credit of up to $6,500 for some existing homeowners.

The reduced credit would be available to all homebuyers who have been in their current residence for a consecutive five-year period in the past eight years.

The new rule also raises the qualifying income limits to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000.

The maximum allowed home purchase price would be $800,000.

A home buyer must have a sale agreement in hand by April 30 and close escrow by June 30, 2010.

Military personnel, deployed overseas for a minimum of 90 days in 2008 or 2009, would have until April 30, 2011 to claim the tax credit.

That's all good news for the housing market.

The National Association of Realtors says as many as 400,000 resale transactions (1.2 million for both new and resale homes) were completed specifically because of the first-time home buyer tax credit, since it began, and that put a dent in the housing inventory.

Home sales also add property and sales tax revenues to the coffers of local governments as reduced inventory helps boost prices and home values.

Fortunately, the first-time home buyer tax credit's availability has coincided with mortgage rates often hanging below 5 percent, according to Jeff Howard, CEO of Erate.com.

As the Nov. 30 tax credit deadline neared, reports from the Commerce Department, revealed new home sales slipped 3.6 percent in September and were down 7.8 percent from September 2008.

Tax credit history

As part of the Housing and Economic Recovery Act of 2008, Congress first created a $7,500 first-time home buyer tax credit for those who purchased a home between April 8, 2008, and July 1, 2009.

Later, under the American Recovery and Reinvestment Act of 2009, Congress extended the credit and raised it to an$8,000 tax credit for those who purchased homes by the current Nov. 30, 2009 expiration date.

By October 9, 2009, more than 1.2 million tax returns had claimed about $8.5 billion in the refundable tax credit, for both new and resale homes - according to the Treasury Inspector General for Tax Administration (TIGTA).

A TIGTA audit also revealed last month that nearly 90,000 taxpayers -- including nearly 600 children -- may have fraudulently enjoyed the credit, hoodwinking the government out of more than $600 million.

The new legislation includes provisions to stifle fraud after the Internal Revenue Service identified 167 suspected criminal schemes and opened nearly 107,000 examinations of potential civil violations of the first-time homebuyer tax credit.

Cheating the IRS is a federal felony that comes with a fine of up to $250,000 and three years in a federal pen, or both.

To combat fraud, a HUD-1 Settlement Statement will have to be attached to the tax return to secure the credit.

For more info:
Broderick Perkins, operates the Silicon Valley-based DeadlineNews Group digital news service. Get the feed from the Deadline Newsroom

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Tax Credit - Tuesday September 15th, 2009 12:51pm
The Basics: 2009 First-Time Home Buyer Tax Credit

Bringing the Dream of Homeownership Within Reach
As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.

Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.

Latest news:

President's Podcast: Urging REALTORS^® to Get "Schooled" (Sept. 1)

Enter the First Time Home Buyer Tax Credit Video Contest (Aug. 24)

Register for Sept. 3rd Research First-Time Home Buyer Tax Credit webinar (Aug. 24)

Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.

To qualify as a "first-time home buyer" the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer's tax credit is determined by two factors:

The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.

The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

If the Buyer(s)' Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.



The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

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 the three-year period, the credit will be recouped on the sale.





Part of NAR's Right Tools, Right Now Initiative

Resources to help you better understand and promote the value of the 2009 First-Time Home Buyer Tax Credit to consumers are available for FREE or AT COST as part of