Let's Talk Real Estate

New income limits for the USDA Guaranteed Rural Housing Program went into effect on April 20th. This includes an increase in the income limits nationwide, as well as the implementation of the new “2-Tier” income limit structure, which will simplify program requirements and the qualification process. Previously, income limits for many counties, including Cumberland & York Counties, depended on the number of persons. There was a different income level for each additional person. The new structure only has two income levels (1-4 persons and 5-8 persons). This increases the maximum income level for most families. Cumberland & York County: $73,600 for 1-4 person household $97,150 for 5-8 person household Portland Metro: $83,250 for 1-4 person household $109,900 for 5-8 person household This is great news for many buyers! Here is the link to look up the Rural Development income limits for your area.

President Obama's "Stimulus Bill" (The American Recovery and Reinvestment Act of 2009), which was signed on February 17, 2009, made significant changes to the energy efficiency tax credits. These changes apply to products "placed in service" in 2009. The highlights are: The tax credits that were previously effective for 2009 have been extended to 2010 as well. The tax credit has been raised from 10% to 30%. The tax credits that were for a specific dollar amount (i.e. $300 for a CAC), have been converted to 30% of the cost. The maximum credit has been raised from $500 to $1,500 total for the two year period (2009-2010). However, some improvements such as geothermal heat pumps, solar water heaters, and solar panels are not subject to the $1,500 maximum. The $200 cap on windows has been removed, but the requirements for windows has been increased significantly. Keep in mind that not all ENERGY STAR qualified windows will qualify. Click here for more specific info

Determining whether or not you are ready to buy a house can be a daunting task. But, whether you are a renter or you are aiming to upgrade to a larger home, there are signs that will indicate whether you are ready to take the buying plunge. So are you ready to make the move? You might be if you: 1. Are familiar with the market. If you have been paying attention to how much houses are listed for in the neighborhoods you are interested in and have a realistic idea of how much a house will cost you, you're in good shape. But if you're dreaming about that big corner house with no clue about the asking price, you may want to spend some more time becoming familiar with the market. 2. Have the money for a down payment and closing costs. The down payment is a percentage of the value of the property. Typically, the percentage will be determined by the type of mortgage you select. Down payments usually range from 3 to 20 percent of the property value. You may also be required to have Pri

The Department of the Treasury and the Department of Housing and Urban Development recently launched a new Web site for consumers seeking information about the Making Home Affordable loan modification and refinancing program. The site offers interactive self-assessment tools to help borrowers determine if they are eligible to participate and calculate the monthly mortgage payment reductions under the program. Go to: http://www.makinghomeaffordable.gov/ to check it out!

The Federal Reserve announced today that it would purchase an additional $750 billion in Fannie Mae and Freddie Mac mortgage-backed securities and up to $300 billion in longer term Treasury securities. This is great news for American home buyers and homeowners because mortgage interest rates will continue to remain at historic lows (and potentially drop even more). This should help improve many home buyer’s ability to purchase a home. Potentially homeowners facing challenges will be able to refinance into better terms. We are already experiencing a great improvement in housing affordability due to historically low interest rates, and the Fed’s move will push affordability conditions to the best levels in 40 years. In addition, continued low rates will lessen foreclosure pressure and help stabilize home prices sooner, as more American buy homes and draw down inventory.

(Note: See Part 1 in previous post) Some Practical Questions 15. How do I apply for the credit? There is no pre-purchase authorization, application or similar approval process. All eligible purchasers 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 http://www.irs.gov/ . 16. 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. 17. So there’s no way to get any cash flow benefits before I file my tax return? Yes, there is. Any first-time homebuyers who believe they are eligible for all or part of the credit can modify their income tax withholding (through their employers) or adjust their quarterly estimated ta

In 2008, Congress enacted a $7500 tax credit designed to be an incentive for first-time homebuyers to purchase a home. The credit was designed as a mechanism to decrease the over-supply of homes for sale. For 2009, Congress has increased the credit to $8000 and made several additional improvements. This revised $8000 tax credit applies to purchases on or after January 1, 2009 and before December 1, 2009. Tax Credits -- The Basics 1. What’s this new homebuyer tax incentive for 2009? The 2008 $7500, repayable credit is increased to $8000 and the repayment feature is eliminated for 2009 purchasers. Any home that is purchased for $80,000 or more qualifies for the full $8000 amount. If the house costs less than $80,000, the credit will be 10% of the cost. Thus, if an individual purchased a home for $75,000, the credit would be $7500. It is available for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. 2. Who is eligible? Only first-time homebuye

As a real estate broker, I have a lot of people approach me with questions regarding how the Homeowner Affordability and Stability Plan impacts their specific situation. Below you will find Q&A from President Obama's blog. You may find this helpful when trying to determine what options are available for you. Borrowers Who Are Current on Their Mortgage Are Asking: What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value? Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities. I owe more than my

The $790 billion stimulus package hammered out by House and Senate conferees late yesterday afternoon drops the repayment feature on the home buyer tax credit. This is great news since the repayment requirement was a discouraging some buyers from taking advantage of the tax credit. The legislation also extends the effective date of the tax credit, which is for up to $7,500, to September 1 (from June 30). Buyers that purchase a home in 2009 using financing assistance from state and local mortgage bonds will be permitted to use the credit as well. Hopefully the combination of changes will encourage more buyers to "get moving". Other provisions reportedly in the bill that could help housing markets and communities include: FHA and conforming loan limits - Specifics have not been released but reports indicate that the 2008 limits have been reinstated for 2009 except in those communities where the 2009 limits are higher. Additional increases in individual communities may also be a

If you have been watching the news this week, you may have noticed that the debate in Washington has finally turned toward real stimulus for the housing industry. As a result, many believe that we could be on the brink of a substantial turn around in the real estate market. Now we need to make sure that our legislators support this stimulus. It is critical that we all join together and deliver a powerful message. Last night, the Lieberman/Isakson Amendment was included in the senate version of the Economic Stimulus Bill by a unanimous voice vote. This amendment would provide a Tax Credit to all home buyers at the rate of 10% of the sales price up to a limit of $15,000. The credit would be available for a one year period to all purchasers of primary residences. Today, the senate expects to debate Amendment 353, a proposal by Senator John Ensign (R-NV) that would provide 30 year fixed financing at a rate of about 4%, for anyone purchasing a primary residence. If these two provisions sur