First Time Homebuyer Tax Credit

One of the provisions of the new Housing and Economic Recovery Act of 2008, signed into law by President Bush on July 30, 2008 provides a First Time Home Buyer Tax Credit. The tax credit is available to qualified first time homebuyers. A first time homebuyer is anyone who has not owned any property in the past 3 years.

- As defined in H.R.3221 Section 36: " FIRST-TIME HOMEBUYER

- The term `first-time homebuyer' means any individual if such individual (and if married, such individual's spouse) had no present ownership interest in a principal residence during the 3-year period ending on the date of the purchase of the principal residence to which this section applies.""In the case of an individual who is a first-time homebuyer of a principal residence in the United States during a taxable year, there shall be allowed as a credit against the tax imposed by this subtitle for such taxable year an amount equal to 10 percent of the purchase price of the residence."
Note: the property may not quailfy for the credit if it is purchased from a relative.

The first time homebuyer tax credit is available to buyers of a primary residence purchased from April 09, 2008 through July 01, 2009. The allowable credit amount is 10% of the purchase price up to a maximum $7,500. Single tax payers with modified adjusted gross incomes up to $75,000. are eligible for the credit and married couples with combined modified adjusted gross incomes up to $150,000 are eligible. The credit is temporary and the amounts taken are recaptured (repaid) in future tax years, up to 15 years of ownership, or when the home is sold.

The new measure is part of the Housing and Economic Recovery Act of 2008. It should stimulate prospective homebuyers who may already recognize the bottom of the market but need another incentive to buy a home in the near future. The First Time Homebuyer Tax Credit is available through June 30, 2009 to qualified buyers. In all probability it will not be available beyond that date. It is a temporary economic stimulus.

Consumers are demonstrating interest in the measure according to the activity reported by the National Association of Home Builders Federal Housing Tax Credit website.

Other provisions of the H.R.3221 include FHA Modernization which increases FHA insured loan amount to 115% of an areas median home price up to a maximum of $625,500 which may in effect allow more working families to take advantage of FHA insured loans. The provision will also allow FHA to guarantee $300 billion to refinance mortgages where homeowners may be facing foreclosure.

Anyone needing more information on the tax credit or on the new loan limits and down payment requirements for FHA insured mortgages or on refinancing into a new loan can contact me directly at 561-306-6736 or email me or visit my website www.ges-realty.com

Homebuyer Tax Credit Causing Chaos

Sept 18, 2009

It seems as though the Federal Homebuyer Tax Credit in 2008 & 2009 did it's job to help boost home sales, although hundreds of thousands who took advantage of the credit are now be told by the IRS that they'll have to give it all back.

In it's typical fashion, the Fed has created confusion, and chaos with misunderstood stipulations, changes mid stream and language that even those who wrote it would be hard pressed to understand.

Over 2.6 million supposedly eligible buyers bought homes and filed for the credit receiving a total of approximately 19 billion dollars in tax breaks. Nearly half of those who received money for the credit on 2009 tax returns will have to return it according to a Federal audit by the U.S. Treasury. Additionally a recording error may cause the IRS to seek repayment from tens of thousands more even though they are entitled to it.

Part of the chaos is a result of Congress enacting 2 different types of credits according to when a homebuyer purchased a home. The rules in 2008 required repayment of the credit up to $7500 over 15 years. A zero interest loan. Congress later changed the program for buyers in 2009 eliminating the repayment requirement, although those who purchased in 2008 are still obligated to repay. (See my blog Homebuyer Tax Credit Changes.)

Confused yet? Don't be it gets better ! Apparently the IRS contributed to the chaos by recording the wrong purchase dates for approximately 73000 homebuyer in 2009, meaning that they will be asked to repay as if they purchased in 2008 under the first version of the bill.

If you purchased a home recently and took advantage of the credit, as many of my own clients did keep good records and have your accountant review the credit requirements with you. There so many variances and stipulations related to this tax credit that I would be all day listing them and in the end listing them in vein. After all the IRS, Treasury and Congress can create confusion whenever and wherever they choose to now can't they?

See my blog on Homebuyer Tax Credit Changes for more on the differences between the credits, purchase dates etc.

George Sinacori

GES Real Estate, LLC

561-306-6736

rebuygeorge@yahoo.com

Homebuyer Tax Credit Changes

Congress has extended and expanded the homebuyer tax credit. The modifications extend through April 30, 2010” and become effective when the President signs the bill. Ideally Dec.01. Changes made to the current credit become effective on that date, as well. Most significantly the time allowed has been extended through April 30, 2010 for contracts and through July for closings. i.e.: A contract after April 30,20010 with a June closing would not be eligible. Income limits have been increased for both single and
married couples and the tax credit is not limited to firsttime homebuyers. A cap on the price of an eligible home will become $800,000. where there previously wasn't any. Following is an outline of these changes as published by the NAR.


Firsttime Buyer –
Amount of Credit $8000 ($4000 married filing separate)
Firsttime Buyer Definition for eligibility: may not have had an interest in a principal residence for 3 years prior to purchase



Current Homeowner –
Amount of Credit $6500 ($3250 married filing separate)


Definition of eligibility - Must have used the home sold or being sold as a principal residence
consecutively for 5 of the previous 8 years



Termination of Credit - Purchases after April 30, 2010
So long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.



Income Limits -
(Note: Increased income limits are effective as of date of enactment of bill)
$125,000 – single $225,000 – married
Additional $20,000 phase out



Limitation on Cost of purchased home
$800,000 effective date of enactment



Purchase by a Dependent is ineligible effective the date of enactment.



Antifraud Rule - Purchaser must attach documentation of purchase to tax return.



If you have questions regarding the newly expanded Homebuyer Tax Credit please call or email me directly. George Sinacori 561-306-6736 - rebuygeorge@yahoo.com

The photo above is a 3BR 21/2 bath 2 car garage home in NW Deerfield Beach, FL and is priced in the low $200,000. See this and more great home listings at http://ges-realty.com

Stimulus - American Recovery??

Now that "Stimulus" has become an everyday word we, the good tax paying, corporate rescuing, stimulus funding Americans find ourselves preoccupied wondering.... "what's in it ?" Even more important ..."what's in it for me ?" Relatively very little is the answer. But than as long as they throw us a bone here and there, we should be humbled and awe inspired at the abilities these great and powerful decision makers have in figuring all this complicated stuff out.

First let me say that they haven't even begun to figure anything out. I have lots of issues with the handling of the Economic Tsunami fiasco being called the "American Recovery & Reinvestment Act of 2009"

Providing banks with billions of dollars in (taxpayers) bailout money with no requirement as to how that money could be used should never have happened. But it did. Not addressing the core or root of the problem, which is housing is still another short sighted, arrogant, ignorant message that our fearless politicos unashamedly send. The message is simple, when it comes to housing banks are more important than individual homeowners.

I tend to look at economic problems in business as if they were a barrel of water with a hole in the bottom. Unless you plug the hole you'll never refill the barrel. In order to plug the hole we need to address housing which requires addressing property values as they relate to mortgages. Unless lenders agree to modify each and every mortgage to current market value the barrel bottom will remain unplugged. Marking down mortgages to market value could quickly stabilize housing. People could confidently sell a property at market without "permission" to reduce the amount owed from a bank allowing sellers to sell with their heads above water. Banks and lenders could concentrate on loaning money to borrowers rather than foreclosing on properties. Many buyers who have gone back to the sidelines after a horrific experience with a short sale attempt would come back into the market and begin buying again. This time directly from sellers. Buyers and sellers today are not market makers. In what there is of a housing market banks and lenders are today's market makers. In order for any free market to thrive and survive it must be comprised of buyers and sellers. When you take them out of the equation (one or the other) there is no market. Stabilizing mortgage values in housing will stimulate spending even further. Any homeowner having or anticipating problems going forward would feel much more confident spending if they weren't so preoccupied with the unknowns. Sellers of homes would again become buyers and stimulate new construction. Buyers of homes buy furniture, TV's, appliances, equipment. Corporations hire when consumers spend, consumers spend when they are confident in the future, housing has always been the key and from my perspective it remains the key. Plug the hole in the barrel before you throw more water into it or it will just drain out of the barrel as it has since the first stimulus attempt in 2008 under the previous administration. And the subsequent $700 billion failed corporate bailout last year. You can't fill a leaky barrel. Fix housing, reset mortgages to today's market value and we can restore the economy.

First Time Homebuyer Tax Credit
One of the items in the "new" Stimulus revisits a failed attempt from the previous plan. Last years legislation approved a First Time Homebuyer Tax Credit up to $7500 with certain restrictions. This shortsighted piece of legislative work required that the credit be paid back to the government, albeit interest free, over a prorated period to the IRS and in full if you sold before it was fully paid back.

The "new revised edition" of First Time Homebuyer Tax Credit allows up to an $8,000. tax credit or 10% of the value with no requirement to repay. Provisions come with income levels that begin to phase out for individuals earning over $75,000 and married couples filing jointly earning more than $150,000. It is available to First Time Homebuyers (anyone who has not owned a home in the past 3 years) buying a home between Jan. 1, 2009 and Dec. 1, 2009 . The credit is forfeited if the property is sold within the first 3 years of ownership.

"Hooray" they got it right this time but my goodness why do they have to fail before the light goes on. Is this going to help? The last measure was an absolute failure and this one is doomed as well until the correlation between home values and outstanding mortgages are seriously attacked.

I'd be remiss if I failed to mention a couple of other "perks" from the stimulus, unrelated to housing that you may benefit from.

- In 2009 you are eligible to receive a tax credit up to $400 per individual and up to $800 per married couple based on 6.2% of your earned income. This fades once incomes of $75K for individuals or $150K for couples are reached. You are eligible whether or not you have a Federal tax liability. This according to a summary of the stimulus bill that the Senate Finance and House Ways and Means committees released.

- If you're fortunate enough to be able to buy a "new" car this year the taxes both State and Federal are deductible. Stipulations are on income limitations.

- Unemployment benefits are not taxed up to the first $2400 of benefits you receive.

- Health Insurance. If you get fired, your company is required to allow you to pay to keep your health insurance, generally for up to 18 months. Now, the federal government will subsidize 65 percent of the premium for up to nine months. You need to have been forced out of your job between Sept. 1, 2008, and Dec. 31, 2009. There are also income limitations in the year you receive the subsidy.

Here's a link to the text of the Legislation which at this writing had not been signed into law by the President.

I've attempted to list some of the items that you and I may directly benefit from as the hundreds of billion of dollars are dispersed in yet another attempt by a clueless Congress, Senate & Administration to "get our economy back on track."

Please call me directly with any questions relating to mortgages, home values, loan modification, refinancing, or buying or selling a property.

George Sinacori

561-306-6736

877-566-2430

rebuygeorge@yahoo.com

http://www.ges-realty.com/

1st Time Homebuyer Tax Extension Possible

Bills to extend the maximum $8,000 tax credit for first-time home buyers, which expires Nov. 30, are pending in both the U.S. House and the Senate.

Sen. Christopher J. Dodd, a Connecticut Democrat and chairman of the Senate Banking, Housing, and Urban Affairs Committee, is co-sponsor of a bill with Georgia Republican Sen. Johnny Isakson that would raise the credit amount to a maximum of $15,000.

Senate Majority Leader Harry M. Reid of Nevada favors an extension of the current credit.
He was quoted by the Las Vegas Sun saying, "It's something we can get done."

Odds are that the credit will be extended and broadened to cover all buyers next year, but the chances of the amount increasing aren’t as good, observers say.

Source: Washington Post Writers Group, Kenneth R. Harney (08/22/2009)

For more on the First Time Homebuyer Tax Credit contact me at rebuygeorge@yahoo.com

George Sinacori

Taxpayers $700,000,000,000 Handout

"Wall Street" has never translated to "housing". Try as they may to make them synonymous it isn't so just because someone says it is or want us to believe it. Looking at the players in the current economic debacle, this madcap comedy of errors, I'm reminded how much the Secretary of the Treasury and the Chairman of the Federal Reserve emulate a classic cartoon comic strip of old. Cartoonist Jeff Fisher's characters Mutt and Jeff were business men, almost smart enough to be con men. Mutt was tall and lanky, slightly bent forward while Jeff, his partner, was shorter, a stockier physical makeup and balding with a mustache and beard. I'll give you a moment here to visualize. OK! See any similarity yet? If not here's a link to Mutt and Jeff. Almost uncanny I think.

These two energetic little lunatics were always looking for the easy way to get something. They would attempt the craziest most hair brained schemes and act on them, believing that they couldn't or wouldn't fail. Mutt and Jeff were always surprised to be tossed on their butts, from wherever they were trying to sell their junk by much more sane level headed people.

Our Treasury Secretary and Chairman of the Federal Reserve however have achieved what the fictional Mutt and Jeff only aspired to. They've somehow convinced the most advanced, most sophisticated and supposedly most intelligent government in the world that they need $700,000,000,000. Is that enough zero's? Congress is busy running around convincing each other to vote one way or the other. The House and Senate have each already voted, one no and the other yes to give. What they've forgotten is that the real issue with the economy is still housing. How does Wall Street translate to housing? I just don't get it. A recent First Time Homebuyer tax rebate has not stimulated people to buy houses. A $300,000,000,000 FHA initiative designed to help refinance "troubled mortgages" has done little. Although that was made available only last week I don't see any rush on FHA refinancing. Federal takeovers of both Fannie Mae & Freddie Mac have cost us tens of billions of dollars and still banks and industry giants continue to fail under multi million dollar leadership.

Corporate greed, corruption and politics as usual have put us all on the edge of our seats waiting to see or hear whether or not Mutt & Jeff have made the ultimate score. A taxpayer handout to rescue Wall Street. What happened to rescuing housing? The aforementioned Homebuyer Tax Credit, FHA plan and Corporate bailouts were all initiatives of our Treasury and Fed leaders. These guys weren't thrown out like Mutt & Jeff, they just haven't worked. Hey here's another hair brained scheme. Give them $700B to try to bail out Wall Street. It may not work but heck if you guys are in a giving mood and your pockets keep getting deeper give it up. No guarantees, no need for oversight or regulation, Mutt & Jeff will let you know when it fails. In the meantime Mr. and Mrs. Taxpayer keep watching and keep waiting. Something good may happen someday.

Like the more sane, level headed business minded people that kept throwing Mutt & Jeff out on their backsides, I want to remind everyone of a little word seldom used anymore when it comes to doling out billions of dollars in response to tantrums born of greed and overindulgence.

Just say NO. Say no to the Wall Street power brokers, say no to the corruption, say no to the partisan politics that have lead us to a dark place in our country's history and say No to any more Mutt & Jeff like schemes. Let the corporations and their overpaid CEO's wallow in not being rescued by taxpayers. Let's get the ball back on the court and concentrate efforts on straighten out the housing crisis.

Push the First Time Homebuyer Tax Credit, pressure banks to employ forbearance efforts for troubled borrowers, move forward with the already in place FHA reforms that as of Oct. 1 are available, and let's take a long look at the arbitrary actions of HELOC lenders in capping or eliminating lines of credit in order to accommodate their own selfish greed.

Mutt & Jeff my answer is NO !

Free $- Time Running Out For Homebuyer Tax Credit

Free $ Are You Getting Yours?

National Association of Realtors estimates that about 1.8 to 2 million first-time buyers will take advantage of the $8,000 First Time Homebuyer tax credit this year, with approximately 350,000 additional sales that would not have taken place without the credit.



Buyers have little time to act because they must complete the transaction by Nov. 30 to qualify for the credit. Unless extended, contracts signed but not completed by that date will not be eligible – it is taking approximately two months to complete home sales in the current market. If it's a short sale it can be longer.

© 2009 FLORIDA ASSOCIATION OF REALTORS®



contact me at 561-306-6736 for more info or email rebuygeorge@yahoo.com

NAR has published it's June Pending Home Sales Index and it is encouraging. The Pending Home Sales Index (PHSI) is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The June numbers don't reflect activity resulting from the Housing & Economic Reform legislation recently signed. Projections are for a improvement in existing homes sales in the months ahead and stronger gains in the fourth quarter as homebuyers begin taking advantage of the First Time Homebuyer Tax Credit and FHA Modernization.

According to Lawrence Yun, NAR chief economist: " This is welcome news because a rise in contract activity is necessary for an overall housing recovery. With a tax credit now available to first-time home buyers, increases in home sales could be sustained with the momentum carrying into 2009.”

According to the report the PHSI rose 9.3% in the South and sales have remained consistently strong in areas where prices have seemingly bottomed, like Sacramento CA, Las Vegas and Ft. Myers. Yun also noted that builders are still facing higher construction costs and new home sales may not benefit as quickly as existing homes until they are able to reduce inventory and costs.
With mortgage rates remaining favorable many buyers may be sensing the bottom and recognizing that owning a home is again affordable.

contact me at http://www.ges-realty.com , email me at rebuygeorge@yahoo.com or call me directly 561-306-6736

1st Time Homebuyer Short Sale Interest Fading

Processing delays have taken their toll on first-time homebuyer interest in short
sales, according to the latest Campbell/Inside Mortgage Finance HousingPulse
Tracking Survey.

First-time homebuyer purchases of short sales dropped to 39.7% of short sale
transactions in August, HousingPulse found. That represented a three-month slide
and was the lowest level for first-time homebuyers ever recorded by the survey.
The first-time homebuyer share of short sales hit a peak of 54.1% of all short sale
transactions in November 2009, just before the originally scheduled expiration of the
federal homebuyer tax credit.

Given that home purchases by current homeowners do little to absorb the supply
of distressed properties, the housing market is increasingly dependent on investors to
pick up any slack in purchases by first-time homebuyers.
Short sale transactions have long been problematic for buyers and sellers alike,
with typical approval times of several months after a homebuyer first submits an
offer. Factors slowing down short sale approvals include lost paperwork,
coordination with multiple investors, slow appraisals, and mortgage servicer
understaffing.

Still, for many first-time homebuyers, average short sale prices of 27% lower than
non-distressed properties compensated for the wait time. But with average time-on-market
for short sales stalled at 16.6 weeks—with the majority of that time spent
waiting for short sale approval—short sale transactions are becoming less popular
with first-time homebuyers.

July Home Sales Increase as Prices Decline

Homebuyers are taking advantage of depressed prices of existing homes. Home sales in July rose by 3.1% with many of the reported sales being foreclosed properties and private owners pressed to sell for less than they had originally paid for a home. The increase in sales is reported to be the largest single monthly increase since Feb. 2007.

Prices of existing or previously owned homes nationally were 7.1% lower in July than they were a year earlier according to the National Association of Realtors (NAR) as homebuyers took advantage of the lower prices and still favorable mortgage rates. Although sales have increased prices have continued to fall. The rule of supply and demand still applies and should continue putting pressure on prices as available homes for sale continue to outpace sales and more inventory comes on the market. . Anyone who does not need to sell quickly should wait until some of the dust settles before putting a home on the market.

Homebuyers may not want to wait to long on the other hand. It may be wise to grab up a property now considering some of the conditions that may affect buying ability or buying power over the coming months:

- On October 1 of this year FHA is required to have the ability to insure and refinance as much as $300 billion dollars in home loans for existing homeowners. This measure of the Housing and Economic Reform Act of 2008 could significantly reduce the number of homes entering the market over the last 3 months of this year.

- Interest rates are favorable now and may begin to rise as inflation becomes more of a threat.

- The First Time Homebuyer Tax Credit is available until June 30th of 2009. Taking advantage of buying this year allows the buyer to take that credit in 2008.

Anyone needing more information on available homes and prices in Southeast Florida can contact me directly either by phone 561-306-6736 or email at rebuygeorge@yahoo.com. You also may want to visit my website at ges-realty.com .