Blog of the Mortgage

Oh What a Difference 6 months makes!?

6 months ago home prices were 10-15% higher than they are today in most counties.
6 months ago we had a very different Administration in place.
6 months ago the brakes had failed and we were hurtling toward the gravel pits to stop the tractor trailer from crashing...
It was summer and I was enjoying the weather, BBQ, friends the whole bit. Heck, the fence between my neighbors place and mine was still standing (it hadn't yet blown over in the wind).
Hey, 6 months ago HERA (Housing and Economic Reform Act) of 2008 was passed into law.
It included a $7500 tax credit for first time home buyers.
(I'll cover it below).

Here we are 6 months later and wouldn't you know it?
Another Act.. this time: ARRA (American Recovery and Reinvestment Act) was passed..
Of course by this time the brakes have failed, the wheels have come off and you can forget about the gravel pits stopping us, at least my Company is still hiring staff and keeping service levels in check (as much as possible)!

Well, in my day to day I came across this company:
MortgageCurrentcy.com.. they've got some great little pieces. one of which I am restructuring and placing in this e-mail so that you can print/read the differences between the HERA/ARRA version's of the first time home buyers credit.

First HERA (2008 Version) -
CREDIT AS CREATED JULY 2008 APPLIES TO ALL QUALIFIED PURCHASES ON OR AFTER APRIL 9, 2008
 
Amount: Lesser of 10% of cost of home or $7500
 
Eligible Property: Any single family residence (including condos, co-ops, townhouses) that will be used as a
principal residence.

Refundable: Yes. Reduces (or can eliminate) income tax
liability for the year of purchase. Any unused
amount of tax credit refunded to purchaser.
 
Income Limit: Yes. Full amount of credit available for
individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000)
 
First-time Homebuyer Only: Yes. Purchaser (and purchaser's spouse) may not have owned a principal residence in 3 years previous to purchase.
 
Revenue Bond Financing: No credit allowed if home financed with state/local bond funding.
 
Repayment: Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with
2010 tax filing.
 
Recapture: If home sold before 15-year repayment period ends, then outstanding balance of repayment
amount recaptured on sale.
 
Termination: July 1, 2009 (But note program changes in 2009)

Effective Date: All revisions are effective as of
January 1, 2009

And now welcoming ARRA (2009)
REVISED CREDIT - EFFECTIVE FOR PURCHASES ON OR
AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009

Amount: Lesser of 10% of cost of home or $8000
Eligible Property: No change. All principal residences eligible.

Refundable: No change. Purchasers will continue to receive refund for unused amount when tax return is filed.

Income Limit: No change. Same income limits continue to apply.

First Time Homebuyer Only: No change. Still available for first-time purchasers only. Three-year rule continues to apply.

Revenue Bond Financing: Purchasers who utilize revenue bond financing can use credit.

Repayment: No repayment for purchases on or after
January 1, 2009 and before December 1, 2009

Recapture: If home is sold within three years of
purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.
 
Termination: December 1, 2009

Effective Date: All revisions are effective as of
January 1, 2009

So, get out there, inform your Realtors (if they don't already know) and get your customers informed as well.

Let's close some purchase loans in March!

I'm looking forward to helping you close more loans in 2009! Have a great weekend.

You'll need the following links to download these forms:

Go out and have fun!
Posted by Raoul Badde on February 24th, 2009 11:24 PMPost a Comment (0)
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