$8,000 Tax Credit For Home Buyers

The $8,000 tax credit for first-time home buyers should entice some first-time home buyers to “jump-in” and buy a home, but it may prove to do little in increasing overall demand as first-time home buyers represent a small percentage of the entire market. Only time will tell if the tax credit is effective.

• Available only to first-time home buyers The tax credit is not a loan and does not require repayment.
• If the home is sold within 3-years, the $8,000 tax credit must be re-paid.
• The tax credit reduces the home buyer’s tax liability; if the buyer’s liability is less than $8,000, the remaining credit will be issued as a check.
• Home purchase must be for a primary residence.
• The credit is available on home purchases between January 1, 2009 and December 1, 2009.
• If you are single and make $75,000 or more, or are married and make $150,000 or more, you do not qualify for the tax credit.
• The credit is not eligible if the seller is a relative of the buyer.

First-Time Homebuyer Tax Credit: Frequently Asked Questions

1. What’s this new homebuyer tax incentive for 2009? The $7,500 repayable credit introduced in 2008 is increased to $8,000 and the repayment feature is eliminated for 2009 purchasers. Any home that is purchased for $80,000 or more qualifies for the full $8,000 amount. If the house costs less than $80,000, the credit will be 10 percent of the cost.

2. Who is eligible? Only first-time homebuyers are eligible. A person is considered a first-time buyer if he/she has not had any ownership interest in a home in the three years previous to the day of the 2009 purchase.

3. Is there an income restriction? Yes. The income restriction is based on the tax filing status the purchaser claims when filinghis/her income tax return. Individuals filing Form 1040 as single (or head of household) are eligible for the credit if their income is no more than $75,000. Married couples who file a Joint return may have income of no more than $150,000.

4. Do individuals with incomes higher than the $75,000 or $150,000 limits lose all the benefit of the credit? Not always. The credit phases out between $75,000-$95,000 for singles and $150,000-$170,000 for those married and filing jointly. The closer a buyer comes to the maximumphase-out amount, the smaller the credit will be. The law provides a formula to gradually withdraw the credit. Thus, the credit will disappear after an individual’s income reaches $95,000 (single return) or $170,000 (joint return).

5. Are there restrictions on the location of the property?Yes. The home must be located in the United States. Property located outside the U.S. is noteligible for the credit.

6. Are there restrictions related to the financing for the mortgage on the property? In 2009, most financing arrangements are acceptable and will not affect eligibility for the credit. Congress eliminated the financing restriction that applied in 2008.

7. How do I apply for the credit?There is no pre-purchase authorization, application or similar approval process. All eligiblepurchasers simply claim the credit on their IRS Form 1040 tax return. The credit will be reflected on a new Form 5405 that will be attached to the 1040. Form 5405 can be found at www.irs.gov.

8. So I can’t use the credit amount as part of my downpayment? No. Congress tried hard to devise a mechanism that would make the funds available for closing costs, but found that pre-funding would require cumbersome processes that would,in effect, bring the IRS into the purchase and settlement phase of the transaction.

9. What if I purchase later this year but can’t get to settlement before Dec. 1? The credit is available for purchases before Dec. 1, 2009. A home is considered as“purchased” when all events have occurred that transfer the title from the seller to the new purchaser. Thus, closings must occur before Dec. 1, 2009, for purchases to be eligible for the credit.

10. I know there is no repayment requirement for the $8,000 credit. Will I ever have to repay any of the credit back to the government? One situation does require a recapture payment back to the government. If you claim the credit but then sell the property within 3 years of the date of purchase, you are required to pay back the full amount of any credit, including any refund you received from it. A few exceptions apply. Note that this same 3-year recapture rule applies, as well, to the $7,500 credit available for 2008. This provision is designed as an anti-flipping rule.

11. What if I die or get divorced or my property is ruined in a natural disaster within the 3 years? The repayment rules are eased for many circumstances. If the homeowner who used the credit dies within the first three years of ownership, there is no recapture. Special rules make adjustments for people who sell homes as part of a divorce settlement, as well. Similarly, adjustments are made in the case of a home that is part of an involuntary conversion.

Click on the below link for more details.

http://www.federalhousingtaxcredit.com/2009/home2.html

David Labrecque
Exclusive Buyer Agent
http://www.fletcher-realty.com/

Isakson amendment gives $15K tax credit to homebuyers

The U.S. Senate on Wednesday unanimously approved an amendment to the economic stimulus bill by U.S. Senator Johnny Isakson, R-Ga., that gives a $15,000 tax credit to anyone who buys a home in the next year.

Isakson’s amendment would provide a direct tax credit to any homebuyer who buys any home. The amount of the tax credit would be $15,000 or 10 percent of the purchase price, whichever is less. Purchases must be made within one year of the legislation’s enactment, and the tax credit would not have to be repaid.

The amendment would allow taxpayers to claim the credit on their 2008 income tax return. It also seeks to prevent misuse by only allowing purchases of a principle residence and by recapturing the credit if the home is sold within two years of purchase. The amendment would sunset the current $7,500 housing tax credit on the date of enactment.
“It is rare that we have a road map to success in times of difficulty, but this country has once before realized a housing crisis every bit as bad as the one we have today and economic troubles every bit as dangerous,” Isakson said. “We have a pervasive housing problem, and we have a historical precedent that works. I am proud this Senate has joined together, learned from history and repeated a method that worked by adopting this amendment.”

In the mid-1970s, America faced a similar housing crisis when a period of easy credit and loose underwriting flooded the market with new construction. Interest rates rose, the economy slowed and America was left with a three-year supply of vacant homes.

Congress responded by passing a $2,000 tax credit for anyone purchasing a new home for their principal residence. Isakson said he believes the results were clear and swift as home values stabilized, housing inventory dropped and the market recovered.
Isakson has not made a decision about his vote on the overall economic stimulus legislation.


David Labrecque
Exclusive Buyer Agent
http://www.fletcher-realty.com/

N.C. Draws People Despite The Economy

North Carolina was one of the nation's fastest growing states from July 2007 to July 2008. Ranked 4th in U.S. Census report. It remains the nation's 10th largest state. With a population of 9,222,414 which represents a 2.03 percent growth (Source US Census Bureau).

North Carolina's population rose 2 percent during the past year, making it the nation's fourth fastest growing state – and the most rapidly growing of any state east of Texas, a new report shows.

The state gained almost 181,000 residents from July 2007 to July 2008, according to the report released Monday by the U.S. Census Bureau. With a 2008 population of 9.2 million, North Carolina remains the nation's 10th largest state.

While the new figures don't reflect any changes during the past five months, when the economy registered its sharpest declines, they do show the state's growth rate is slowing. From 2006 to 2007, the state's population increased 2.17 percent.

But only Utah, Arizona and Texas grew at a faster rate, the reports shows.

South Carolina was the nation's 10th fastest growing state. It now has about 4.5 million residents, an increase of 1.7 percent over the previous year.

North Carolina passed New Jersey in population two years ago. Today, it has about a half-million fewer residents than Georgia, the next largest state.

Migration is driving North Carolina's growth, with many coming here for the jobs, climate and quality of life, experts say.

“There's been a slowdown in job creation, but we are still creating jobs,” says Tony Crumbley, vice president of research for the Charlotte Chamber. “…The quality of life in mid-sized cities in the South is where people want to be.”

The three N.C. counties that gained the most residents from 2000 to 2007 were, respectively, Wake, Mecklenburg and Union, according to figures from the N.C. Office of State Budget and Management.

The Census report also shows:

The nation's fastest growth occurred in the Rocky Mountains, home to six of the 10 fastest-growing states.

While the West was the fastest-growing region, the South added more people.
Northeastern states on the whole have gained population at an increasing rate since 2005, a change from the declining growth from 2000 to 2005.

Only two states – Michigan and Rhode Island – lost population from 2007 to 2008.

By Ames Alexander
Staff Writer
Charlotte News & Observer
Posted: Tuesday, Dec. 23, 2008

Staff Writer Ted Mellnik and The (Raleigh) News & Observer contributed.


David Labrecque
Exclusive Buyer Agent
http://www.fletcher-realty.com

Fannie Mae Gives Servicers More Flexibility to Help Borrowers Avoid Foreclosure

On December 8, 2008, Fannie Mae announced it was giving mortgages Servicers more flexibility and more loss mitigation options to minimize foreclosures. The changes will allow Servicers to act earlier to avoid potential delinquencies. The changes affect mortgages in mortgage backed securities (MBSs) and mortgages held by Fannie Mae in portfolio.

The changes "build on and complement" the Streamlined Loan Modification Program (SLMP) that takes effect on December 15, 2008, and is described elsewhere in this week's Washington Report. Highlights of the changes include:

• Authority for Servicers to apply loss mitigation tools for borrowers facing reasonably foreseeable, imminent default, so they don't have to wait until they are late making payments.
• A new Early Workout program that allows Servicers to pre-negotiate a loan modification that takes effect and becomes permanent after the borrower successfully completes a trial period.
• Clarification that a loan can remain in a pool even if it is 24 months delinquent, if there is ongoing activity to address the problem.
• Elimination of the requirement that a loan must proceed to foreclosure after a specified period of delinquency.

Fannie Mae has also announced a new Single Family Master Trust Agreement that will allow Servicers, for new MBSs, to remove a loan that is 30 days delinquent from the MBS to modify the loan.

Freddie Mac guidelines also permit Servicers to address problems faced by borrowers who are at risk of imminent default. It is not known whether Freddie is considering enhancing this policy to complement the SLMP.


David Labrecque
Exclusive Buyer Agent
http://www.fletcher-realty.com/

USDA Homes Viable Alternative

USDA offers 100% financing where the borrower can finance closing costs and prepaids if supported by appraised value making it easy for borrowers with limited assets. Two important factors are property and borrower income eligibility. These can be determined at http://eligibility.sc.egov.usda.gov/. The Raleigh USDA office is 873-2051.

USDA Features:

• Can roll the 2% tax-deductible, non-refundable funding fee into the loan amount making it a 102LTV program! Take the loan amount and divide by .98 for the total loan amount.
• If score is 620 or greater, no need to verify rent history; no derogatory credit explanations but we may require collections to be paid.
• An FHA appraisal is not required but the appraiser can certify “minimum property standards” is met and a Home Inspection by a licensed inspector isn’t required.
• Collection accounts aged <12>12 months have to be paid is u/w discretion.
• DTI’s are 29/41 or 31/43 on homes built 4/2002 or after.
• Ratio waivers can be requested with compensating factors.
• Seller concessions limited to 6%.
• Lend up to the appraised value which the borrower can add in closing costs, prepaids, and repairs. Escrow holdbacks are allowed. See Broker Guide for details.
• All bankruptcies, foreclosures that resulted in a loss of security, and judgments must be seasoned 36 months from discharge date! 2 years for Ch 13. No exceptions.
• Primary occupancy only! Only refis for USDA to USDA only. 30 year fixed only.
• Water test is always needed with private wells: bacteria test only is required.
• No limits on gift of equity.
  
  David Labrecque
  Exclusive Buyer Agent
  http://www.fletcher-realty.com/

Golden State Foods New Facility – Garner

Fletcher Realty is one of the companies that will help some of you move from either Suffolk, VA or Greensboro, NC.

Below are some photos of the construction site for your new Golden State Foods plant in Garner. I will be updating these each week to show you the progress. Use the link to Fletcher Realty at the bottom of this post to discover who we are and do a search for homes in the Raleigh area.

Let others in your company know about this post so they can view the progress too. I look forward to making your move to Garner fun and painless.

David Labrecque
Exclusive Buyer Agent
http://www.fletcher-realty.com/

Home Ownership "V" Stock Market

Here are five reasons why you get more for your money with a house than the stock market:

1. Leverage. With stocks, you put in all your money for a little piece of a company. With a house, you put in a little money to get the entire house.

2. Tax benefits. Uncle Sam knows that owning a home is a pain in the neck; that's why you get tax incentives. These are basically government bribes to get you to buy. Think about it, with what other investment can you put in 5 percent of the cost of the asset, reap all the appreciation, and pay no capital gains? That's right: live in your home for at least two years, and you don’t have to pay capital gains tax on up to $250,000 in appreciation if you’re single and a combined $500,000 if you’re a married couple.And that's not all — consider the benefits of fixed-rate mortgages, property tax write-offs, interest rate deductions, and depreciation. Is this a great country or what?

3. Control. When you buy stocks, you're paying some CEO 500 times the average worker's salary for company performance that most other workers would lose their job over. With a home, you have control — what you buy, how much you pay, and where you live. You can improve the value with repairs and updates. Try comparing that to getting heard at the next shareholders' meeting!

4. Lifestyle. Do you want to look at a concrete jungle or your children playing in your own back yard? With a home, you're purchasing a vantage point for yourself and your family. The neighborhood you want to be in, and the size and style of a home that fits your needs.

5. Value. Unlike some stocks, your house will seldom become worthless. Barring a catastrophe, your home will retain a major portion of its value, even in the worst of times. So don't freak out about slight fluctuations in the value of your home in any given year. You'll make it up. Housing has lost value only one year out of the last 35. It's more normal to beat inflation by 1 percent to 2 percent.

David Labrecque
Exclusive Buyer Agent
http://www.fletcher-realty.com/

Law Makes Housing Affordable for Veterans

Veterans across America now have expanded homeownership opportunities due to the Veterans’ Benefits Improvement Act of 2008, which President George W. Bush signed into law last Friday. Three provisions in the legislation are critical to help veterans during the current housing turmoil.

• The law will make it easier for veterans who have fallen victim to risky sub prime loans to refinance their loans into safer, more affordable loans backed by the U.S Department of Veterans Affairs.
• The legislation also makes the VA loan limit increases permanent, which will help veterans living in high-cost areas.
• The VA also can now offer adjustable-rate mortgages to veterans. That would make homeownership more attainable for military families and personnel who often have to move more frequently than their civilian counterparts.
  
  David Labrecque
  Exclusive Buyer Agent
  http://www.fletcher-realty.com/