Register Real Estate Advisors

Breaking News/RISMEDIA, November 6, 2009 – After the Senate gave final approval last night without a dissenting vote, the House of Representatives voted overwhelmingly this afternoon to pass legislation containing an extension and expansion of the home buyer tax credit, completing Congressional action and sending the tax credit to President Obama for his signature, possibly as early as tomorrow.

The $8,000 homebuyer tax credit for first-time buyers, due to expire in 25 days, will be extended through April 30 of next year and buyers will have an additional two months, until the end of June, to close.  First-time buyers who are in the process of making a purchase will no longer need to worry about qualifying for the $8,000 tax credit if they close after the November 30 deadline.  The new legislation increases the income limit for couples with income up to $225,000, a nearly $55,000 increase above the level in existing law.

For the first time, the new legislation makes buyers who already own a home eligible for a credit.  A $6,500 maximum credit will be available to existing homeowners who have lived in their current residence for five of the prior eight years.  The legislation limits eligibility for the existing homeowner credit to homes worth $800,000 or less.

The legislation takes effect December 1 and is not retroactive.  Both credits are available only for primary residences, not second homes or investment properties.

SAN ANTONIO (San Antonio Express-News) – The Texas Department of Housing and Community Affairs is no longer accepting applications for short-term loans to homebuyers eligible for the $8,000 federal tax credit.

Because first-time homebuyers generally have enough money to cover their down payment, but not always enough to pay closing costs, the state has been offering 90-day loans since July to help them use the federal tax credit.

Since the department set aside $7.5 million and began offering the loans, it has received 1,225 applications. It stopped accepting loans to ensure it could process them by Dec. 1, the deadline to finalize home purchases while taking advantage of the tax credit.

This is from an article in the Wall Street Journal and I thought my readers would find it interesting…

First-time home buyers are scurrying to qualify for a federal tax credit that expires at the end of November — a trend that has been propping up sales following the worst downturn in decades. Because the closing process can drag on, buyers realistically have just a few weeks left to sign contracts; and they are submitting multiple offers to be certain that one goes through. Although lawmakers have proposed to extend and expand the credit, prospects for such a move are dimming as legislators are urged to show fiscal restraint following mega-bailouts of the financial and automobile sectors. Some housing analysts worry that the credit sparked unneeded supply and that its expiration could drag the market back down.

WASHINGTON (Nation’s Building News) – The Texas Department of Housing and Community Affairs has introduced two loan programs designed to help first-time homebuyers apply the new $8,000 tax credit toward down payments and closing costs.

The 90-Day Down Payment Assistance Program and the Mortgage Advantage Program will allow consumers to receive a short-term loan before filing for and receiving the federal tax credit. Consumers can apply these loans toward down payments and closing costs.

Both programs provide assistance of up to 5 percent on the first lien mortgage, but the 90-day program maxes out at $7,000 while the Mortgage Advantage Program’s limit is $6,000.

Repayment times also vary for the two programs, at 90 days and 120 days, respectively.

More information about these programs is available at the Texas Department of Housing and Community Affairs’ website.

Read more about the $8,000 tax credit in next month’s issue of Tierra Grande magazine.