HUD Approves Tax Credit Loans for FHA Mortgages
From the May 29, 2009 edition of the National Mortgage News, http://www.nationalmortgagenews.com/
The Department of Housing and Urban Development issued guidance that opens the door for FHA-approved lenders to provide short-term loans — with restrictions — to borrowers who are eligible for the $8,000 first-time home buyer tax credit.
Borrowers must still come up with the required minimum 3.5% down payment using their own funds. But after that, they can use the short-term loans to increase their down payments, cover their closing costs or buy-down their mortgage rate. Calling the tax credit advance "another step towards accelerating the housing market," HUD secretary Shaun Donovan told the National Association of Home Builders' annual spring board meeting in Washington that the initiative is a "real win for everyone." The NAHB estimates the advance will lead to 160,000 more sales — 101,000 to first-time buyers and 59,000 to move-up buyers who are selling their current residences to first-timers.
Tax credit loans made by state and local housing finance agencies, government agencies and certain nonprofit groups can be used to cover the minimum 3.5%. However, non-profits that receive fees from sellers cannot provide downpayment assistance under this program. HUD didn't want to do anything that would allow "these seller-funded schemes back in," a senior HUD official said. The department has issued a mortgagee letter (2009-15) with guidance on acceptable interest rates and fees. "We are putting in place the necessary safeguards and consumer protections, and if monitored the right way, tax credit loans can be used efficiently and safely," secretary Donovan said.
Friday, May 29, 2009
Thursday, May 28, 2009
Things You Should Know About the $8000 Tax Credit
Receiving a check for $8,000 when you file your taxes next year (or when you amend your 2008 taxes as soon as you close...) is a great incentive to buy, however there are some things you should keep in mind:
To qualify you must be:
- A true first time homebuyer
- You’ve held no ownership interest in your primary residence for AT LEAST three years prior to the date in which you close on the home
There is an income cap:
- If you make $75,000 ($150,000 if married) or less you are eligible for the entire $8,000
- If you make between $75,000 and $95,000 ($150,000 to $170,000 if married) the credit amount is reduced
- If you make over $95,000 (over $170,000 if married) you are not eligible for the credit
The amount you receive is dependent upon a couple of things:
- Whether you are single or married
- If you are married and filing joint, you would claim the eligible amount on one return
- If you are married and filing separately you each can claim half of the eligible amount
- If you are single but hold a partial interest in the home see point ‘b'
- Your ownership interest in the home
- If you purchased the home with others you can claim a certain percentage of the total amount received for the credit. For example if two people purchased the home equally, the ownership interest would be 50%; three people 33%, etc…
There is a possibility that you’ll have to pay back the credit
- If you sell the home you purchased within three years you may be required to repay the money you received.
- There are other possibilities, please see form 5405’s instructions for further information regarding repayment requirements.
The deadline to receive the credit when you file your 2009 taxes is December 1, 2009:
- If you do not close on a home before this date you will not be eligible for this particular credit.
- To claim the credit you’ll need to complete form number 5405 and submit it with your tax return
Please feel free to contact me with any questions you may have about the area or if you'd like me to send you the current active listings in the area. I look forward to hearing from you!
Search homes currently on the market
My website
Call me at 207-415-0415 or email me at mullett@greentreerealtymaine.com
Michael Mullett
Associate Broker
Green Tree Realty
522 Washington Avenue
Portland, ME 04103
(207) 772-4242
Cell (207) 415-0415
To qualify you must be:
- A true first time homebuyer
- You’ve held no ownership interest in your primary residence for AT LEAST three years prior to the date in which you close on the home
There is an income cap:
- If you make $75,000 ($150,000 if married) or less you are eligible for the entire $8,000
- If you make between $75,000 and $95,000 ($150,000 to $170,000 if married) the credit amount is reduced
- If you make over $95,000 (over $170,000 if married) you are not eligible for the credit
The amount you receive is dependent upon a couple of things:
- Whether you are single or married
- If you are married and filing joint, you would claim the eligible amount on one return
- If you are married and filing separately you each can claim half of the eligible amount
- If you are single but hold a partial interest in the home see point ‘b'
- Your ownership interest in the home
- If you purchased the home with others you can claim a certain percentage of the total amount received for the credit. For example if two people purchased the home equally, the ownership interest would be 50%; three people 33%, etc…
There is a possibility that you’ll have to pay back the credit
- If you sell the home you purchased within three years you may be required to repay the money you received.
- There are other possibilities, please see form 5405’s instructions for further information regarding repayment requirements.
The deadline to receive the credit when you file your 2009 taxes is December 1, 2009:
- If you do not close on a home before this date you will not be eligible for this particular credit.
- To claim the credit you’ll need to complete form number 5405 and submit it with your tax return
Please feel free to contact me with any questions you may have about the area or if you'd like me to send you the current active listings in the area. I look forward to hearing from you!
Search homes currently on the market
My website
Call me at 207-415-0415 or email me at mullett@greentreerealtymaine.com
Michael Mullett
Associate Broker
Green Tree Realty
522 Washington Avenue
Portland, ME 04103
(207) 772-4242
Cell (207) 415-0415
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