Home Buyers Tax Credit Revised Dec 2009

Who Gets What?
First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

What are the Income Caps?
The amount of income someone can earn and qualify for the full amount of the credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

What is the Maximum Purchase Price?
Qualifying buyers may purchase a property with a maximum sale price of $800,000.

What is a Tax Credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.

How Much are First-Time Homebuyers (FTH Eligible to Receive?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

Who is Eligible laceType w:st="on">fortlaceType> laceName w:st="on">FTHBlaceName> Tax Credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible.

This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

How Much are Current Home Owners Eligible to Receive?
The tax credit program includes a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Can Homebuyers Claim the Tax Credit in Advance of Purchasing a Property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

Can a Taxpayer Claim a Credit if the Property is Purchased from a Seller with Seller Financing and the Seller Retains Title to the Property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Some examples of this would include a land contract or a contract for deed.

According to the IRS, factors that would demonstrate the ownership of the property would include:
1. Right of possession,
2. Right to obtain legal title upon full payment of the purchase price,
3. Right to construct improvements,
4. Obligation to pay property taxes,
5. Risk of loss,
6. Responsibility to insure the property, and
7. Duty to maintain the property.

Are There Other Restrictions to Taking the FTHB Credit?
Yes. According to the IRS, if any of the following describe a homebuyer’s situation, a credit would not be due:

• They buy the home from a close relative. This includes a spouse, parent, grandparent, child or grandchild. (Please see the question below for details regarding purchases from “step-relatives.”)
• They do not use the home as your principal residence.
• They sell their home before the end of the year.
• They are a nonresident alien.
• They are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
• Their home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
• They owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2005, through July 1, 2008.

Can Homebuyers Purchase a Home from a Step-Relative and Still be Eligible for the Credit?
Yes. As long as the person they buy the home from is not a direct blood relative, the purchase would be allowed.

If a Parent (Who Will Not Live In The Property) Cosigns for a Mortgage, Will Their Child Still be Eligible for the Credit?

Yes, provided that the child meets the other requirements for the tax credit.                          


As always, this information is provided as a guide.  Please consult your accountant or attorney for financial and legal matters.

Proposed changes or new guidelines announced by Donovan on December 2, 2009 include:

-- HUD will increase "up front" cash required on a home purchase, giving the buyer more "skin-in-the-game." FHA said it can tap several options, and analysts say it will mean some increase to the current minimum down payment of 3.5 percent.

-- HUD might increase the 1.75 percent up-front premium and/or annual mortgage premiums. It is asking Congress to raise annual premiums since that would raise capital with the lowest borrower impact, Donovan said.

-- HUD cut allowable seller concessions to 3 percent from 6 percent in a move to limit incentives to inflate appraised values. The move reduces the money the seller can contribute to a buyer's closing costs, discount points and other concessions without impacting the buyer's mortgage.

-- The FHA will raise the minimum credit score for new borrowers. The FHA has yet to determine the minimum "FICO" and may factor in the down payment.

Check out this great Panther Trace home. Pather Trace is one of the nicest communities in the Tampa Real Estate market. The price has just been reduced about $90,000! The home is awesome. It is 4 bedrooms, 2.5 baths, bonus room, huge living room, fireplace in master bedroom, California closet and situated on a pond. It is now priced at $279,900. Give us a call to see this house today. It really is worth a look!









Jeff Gould
CENTURY 21 Beggins

Well at long last the government with their wisdom has put together the Homeowner Affordability and Stability Plan or Making Home Affordable Plan. Per the press release this plan is suppose to offer assistance to 7 to 9 million homeowners by making their mortgages more affordable and helping to prevent the destructive impact of foreclosures on families, communities and the national economy. The backbone of the Homeowner Affordability and Stability Plan is based on whether or not your existing mortgage is owned by Fannie Mae or Freddie Mac. It seems that people are having a hard time finding out who truly owns their mortgage. Please see the links below for help.

To see some of the details of the plan click here: Homeowner Affordability and Stability Plan summary

To see if Fannie Mae owns your loan click here: Fannie Mae Search

To see if Freddie Mac owns your loan click here: Freddie Mac Search

I hope this helps! Although not my preferred plan at least it is something.

If you are looking for a trustworthy lender to refinance a loan or get a new mortgage with send me and email and I will get you the contact information for the folks we use, they are really good. It is a good idea to shop around so don't just take my word for it!

Jeff Gould
CENTURY 21 Beggins
jeffgould@century21beggins.com

I've been having a few of my blog readers asking about my listings and if I would post them. Currently I have 24 active listing in the Tampa real estate market. I have a couple of great deals and a few good deals and some that the sellers need to come down on the price.

Instead of posting all of my listings here I will just highlight the ones I think are really good buys.

This one is in Riverview, Florida. It is located in the Panther Trace subdivision. For those of you unfamiliar with Panther Trace, it is one of the nicer master planned communities in the area.

This house is 5 bedrooms, 3 baths, living room, dining room and bonus room. The total square footage is 2496 but feels larger. The homesite sits on a nice lot that backs up to a pond. This home would be great for a large family or a real estate investor. The home is listed for $219,900. As an investor:

20% Down = $44,000
Amount Financed = $176,000
30 years @ 6% = $1055 per month
Hazard Insurance = $85 per month
Taxes = $375 per month
CDD = $100 per month

Total monthly expenses = $1615.00 (estimated)

My guess is you could rent the house between $1550 - $1700 per month (just a guess). The good news is that you can write off some of those expenses. Now do you believe that in 5 years this home will be worth more or less? I think it will be worth at least $120 per square foot. That give it a value of $299,520. So over 5 years on a $44,000 investment you would create a profit almost 200% or 40% a year. Where else are you going to get that return now?

This is what is going to help the Tampa real estate market and the other markets around the country recover. Those that can look past all the doom and gloom and see the silver lining will do really well.

For additional information feel free to give me a shout.

Jeff Gould

The St. Pete Times interviewed our Broker, Craig Beggins this week.  Craig explains that this home market is now the perfect calm with low interest rates, low home prices, and an abundance to choose from for buyers.

See more here: http://www.tampabay.com/news/business/realestate/article972114.ece

Per pewsocialtrends.org Tampa ranks 4th as one of America's Most Popular Cities. Tampa is behind Denver, San Diego, Seattle and tied with Orlando and San Francisco. Even though real estate is currently struggling this is a good thing for Tampa Real Estate. When the market really starts to recover Tampa will be one of the leading cities for the recovery. Not too bad Tampa, congrats!

Jeff Gould

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in December, rose 6.3 percent to 87.7 from an upwardly revised reading of 82.5 in November, and is 2.1 percent higher than December 2007 when it was 85.9. This gain was higher than expected and hopefully a true market change. As far as the Tampa Real Estate market is concerned, we are noticing more traffic to our listings. I have another listing scheduled to close tomorrow. So I think things are looking a little better.

Jeff Gould

STOP the Madness!

Enough is enough, can you believe the junk added to the new bailout? If it did not make me so mad when I look at it the entire thing would seem like a big nightmare. I keep hoping I will wake up and the economy and the real estate market will be somewhat normal.

Check out some of the GARBAGE added to the new bailout plan!

• $2 billion earmark to re-start FutureGen, a near-zero emissions coal power plant in Illinois that the Department of Energy defunded last year because it said the project was inefficient.

• A $246 million tax break for Hollywood movie producers to buy motion picture film.

• $650 million for the digital television converter box coupon program.

• $88 million for the Coast Guard to design a new polar icebreaker (arctic ship).

• $448 million for constructing the Department of Homeland Security headquarters.

• $248 million for furniture at the new Homeland Security headquarters.

• $600 million to buy hybrid vehicles for federal employees.

• $400 million for the Centers for Disease Control to screen and prevent STD's.

• $1.4 billion for rural waste disposal programs.

• $125 million for the Washington sewer system.

• $150 million for Smithsonian museum facilities.

• $1 billion for the 2010 Census, which has a projected cost overrun of $3 billion.

• $75 million for "smoking cessation activities."

• $200 million for public computer centers at community colleges.

• $75 million for salaries of employees at the FBI.

• $25 million for tribal alcohol and substance abuse reduction.

• $500 million for flood reduction projects on the Mississippi River.

• $10 million to inspect canals in urban areas.

• $6 billion to turn federal buildings into "green" buildings.

• $500 million for state and local fire stations.

• $650 million for wildland fire management on forest service lands.

• $1.2 billion for "youth activities," including youth summer job programs.

• $88 million for renovating the headquarters of the Public Health Service.

• $412 million for CDC buildings and property.

• $500 million for building and repairing National Institutes of Health facilities in Bethesda, Maryland.

• $160 million for "paid volunteers" at the Corporation for National and Community Service.

• $5.5 million for "energy efficiency initiatives" at the Department of Veterans Affairs National Cemetery Administration.

• $850 million for Amtrak.

• $100 million for reducing the hazard of lead-based paint.

• $75 million to construct a "security training" facility for State Department Security officers when they can be trained at existing facilities of other agencies.

• $110 million to the Farm Service Agency to upgrade computer systems.

• $200 million in funding for the lease of alternative energy vehicles for use on military installations.

This in my opinion is unbelievable. I agree that some of these programs and ideas are good, however, when the country is out of money (and it is) we should ONLY be spending in places that will actually add jobs to the economy!!!

Mr. President I have a better idea!

1) Use FHA, Fannie Mae and Freddie Mac to lend directly to the borrower for a 1 year period. (I know it's socialism. Get over it! The banks are not lending at fair rates right now and won't until housing prices start to appreciate).

2) Allow ALL Primary Home owners to purchase or refinance at 3.5% regardless of their current situation.

3) Allow investors to refinance at 5% as long as they are currently not behind on their mortgage.

4) Allow new investors to purchase at 5% using the current FHA guidelines. Except FHA needs to expand their loan limits to cover all appraised homes.

5) Cap all mortgage brokers to 1.5% total commission for one of these loans.

Remember the Fed Funds is currently around .25% so on the good loans we'd be lending in the positive. There will be a certain number of loans that will go bad but I guarantee you it won't be a Trillion Dollars worth. This will allow current home owners and investors keep homes from going into foreclosure. It will also increase demand on for new purchases. This will raise prices! Also we all know that the US economy is mostly driven by real estate, when it corrects construction will start, appliances will be sold and people will start getting hired back to work. Guess what that does to the economy? Oh yeah and we did not give a Trillion Dollars away!

Jeff Gould

Super Bowl XLIII in Tampa is fast approaching. There is a fun filled excitement in the air. I keep having some celebrity run ins from Michael Jordan to Jerry Rice. Talk about two great role models, I wish more of today's player's would have the class and professionalism of those two.

It looks like the weather for the game is going to be about 65 - 70 and sunny. Why is this important? Well most of the rest of the country is getting hammered with snow, ice and frigid weather. Tampa will be a beautiful 70 and sunny. Where would you prefer to be? I know I would pick Tampa. With millions of people from around the world watching the game, I believe that this Super Bowl will help our struggling real estate market a little bit as new people will want to move to the great weather. How much it will help will remain to be seen and I am sure we'll never know the exact numbers but it cannot hurt.

Let's have a great game!

Jeff Gould