Susanne McInerney RE/MAX Landmark 617-762-4014 Fax: 781-634-0456 555 Washington St WellesleyMA02482
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Presented by: Susanne McInerney
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Opportunity of a Lifetime for First-Time Buyers
 For aspiring home owners who find their goal stubbornly elusive, newly enacted legislation providing a tax credit of as much as $7,500 for first-time home buyers might just be the opportunity of a lifetime.
But like so many of the good things in life, time is of the essence for buyers who want to take advantage of this outstanding opportunity. Only homes purchased on or after April 9, 2008 and before July 1, 2009 are eligible.
First-Time Home Buyer Tax Credit at a Glance
· The tax credit is available for first-time home buyers only.
· The maximum credit amount is $7,500.
· The credit is available for homes purchased on or after April 9, 2008 and before July 1, 2009.
· Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
· The tax credit works like an interest-free loan and must be repaid over a 15-year period.
Below is a more detailed look at the Housing Bill:
Landmark Housing Bill Awaits Signature of President Bush
Culminating months of intensive advocacy efforts by the entire National Association of Home Builders (NAHB) federation, the Senate has approved a major housing stimulus package that will go to the President’s desk to be signed into law shortly.
“This landmark bill contains several provisions to help home buyers, stop the slide in home prices, provide a lifeline to borrowers facing foreclosure, improve mortgage liquidity and bolster confidence in Fannie Mae and Freddie Mac,” said NAHB President Sandy Dunn. “We commend Congress for working in a bipartisan fashion to provide much-needed relief to the American people.”
For the past year, NAHB has been in the forefront in pushing for legislation to address the turmoil in the financial and housing markets and to bolster the nation’s faltering economy.
Senate Banking Committee Chairman Chris Dodd (D-Conn.), a chief architect of the bill, calls it “the most important piece of housing legislation in a generation.”
Echoing those comments, House Speaker Nancy Pelosi (D-Calif.) said that the bill “represents the most far-reaching reform of our nation’s housing finance system in a generation.”
H.R. 3221, the Housing and Economic Recovery Act of 2008, includes several provisions aimed at ending the current cyclical downturn in the housing industry and strengthening the housing finance system so that it will provide critical support as the marketplace gains strength.
The House on July 23 approved the legislation by a vote of 272 to 152, sending the measure back to the Senate where Majority Leader Harry Reid (D-Nev.) shortly thereafter attempted to bring the bill up for immediate consideration through a unanimous consent agreement.
Reid’s effort was thwarted by Sen. Jim DeMint (R-S.C.), a long-time opponent of the bill, who used parliamentary maneuvers to delay a final vote on the bill until the Senate approved the measure by a solid bipartisan vote of 72 to 13.
The key elements of the bill are:
- A temporary first-time home buyer tax credit. The tax credit will stimulate home buying, reduce excess supply in housing markets and shore up home prices.
- FHA modernization. A revitalized FHA will have a greater flexibility to respond to the needs of borrowers, enable more working families to become home owners and play an important role in mortgage markets. To address the foreclosure crisis, the FHA will guarantee up to $300 billion to refinance troubled mortgages with federal insurance.
- GSE (Government-Sponsored Enterprise) reform. The law reforms the regulation of Fannie Mae and Freddie Mac and permanently increases the conforming loan limit to help buyers in high-cost markets. To reassure financial and global markets, the government will temporarily expand its line of credit to Fannie and Freddie and permit the U.S. Treasury to purchase an equity stake in the companies through the end of 2009.
- Mortgage Revenue Bond Program. The measure gives states the ability to issue an additional $11 billion in mortgage revenue bonds, which will help strapped borrowers seeking to refinance their home loans.
- Low Income Housing Tax Credit. Enhancing this program will expand the supply of much-needed affordable rental housing.
Tax Credit Centerpiece of Housing Bill
The centerpiece of the housing bill is a temporary, $7,500 first-time home buyer tax credit for the purchase of any home. The tax credit can be used for a home sale closing on or after April 9, 2008 and before July 1, 2009. It is expected to provide a significant financial incentive for home buyers.
“The tax credit is the best stimulative measure,” said Dunn. “It will increase housing demand, get home buyers back into the marketplace and fight falling home prices, which threaten the economy as a whole.”
As first drafted, the tax credit was set to expire on April 1, 2009. At NAHB’s urging, Congress extended the expiration date through June 2009.
“Extending the credit an additional 90 days was important so that home buyers would have use of the credit during the critical 2009 spring and early summer buying season, when we believe the bulk of home purchases will occur,” said Dunn.
Once President Bush signs the legislation into law, NAHB will launch a new Web site — www.federalhousingtaxcredit.com — which includes a set of comprehensive questions and answers about how the credit works and how consumers can put it to their advantage.
Further resources to help NAHB members promote consumer awareness about the credit will also be available at www.nahb.org/mythbuster.
For more specifics on provisions of the housing and economic stimulus legislation, read the stories in the Government section of this special edition of Nation’s Building News (www.nbnnews.com).
Other Provisions
The legislation would also:
- Provide $3.9 billion in Community Development Block Grant funding for the purchase of foreclosed homes and the rehabilitation or redevelopment of residential property.
- Provide a $500 additional standard deduction ($1,000 for married couples) in tax year 2008 for taxpayers who do not itemize their deductions but pay property taxes.
- Increase the Department of Veterans Affairs home loan limit for high-cost housing areas so that veterans have more homeownership opportunities.
- Help returning soldiers to stay in their home by requiring lenders to wait nine months, instead of 90 days, before starting foreclosure proceedings. Lenders must also wait one year before raising interest rates on someone returning from the military.
- Encourage states to establish mortgage licensing and registry systems and direct the Department of Housing and Urban Development to step in if the states fail to accomplish this task.
- THOU SHALT FIND YOURSELF A REALTOR. Yes, I know this may be a biased issue, but for the life of me, I can’t understand why any one would even consider buying a home without representation. A good REALTOR will become your most essential advocate and adviser. And it’s FREE TO YOU! NO BRAINER! Shop around, find someone you click with and trust, if you happen upon someone you don’t like, don’t be afraid to open up a discussion or find yourself another agent. AND don’t bristle when your agent asks you to sign a Buyer Rep agreement. If your agent isn’t formally representing you, then the agent is representing the seller by default.
- THOU SHALT GET PRE-QUALIFIED FOR A LOAN. This should be the first thing you should do before looking at one single house. Get your lender to give you a “pre-qualification letter” and give a copy to your agent. Lots of sellers want a copy when you submit an offer, it gives your offer more strength. It’s not difficult, not time-consuming, a good lender can do it over the phone and get you a letter the same day!
- THOU SHALT NOT BUY ANYTHING BIG while home searching. No, silly, not groceries or gas, I’m talking about major purchase i.e. car, yacht, a $30k TV (yes, I saw one of these, who needs a $30,000 TV???? I mean, really!!! Sorry I digress….), you get it, right? Purchasing anything BIG on credit, affects your credit score so wait until after you close!
- THOU SHALT GET A HOME INSPECTION. No, this is not required BUT I STRONGLY recommend that you get one, there’s almost no reason not to. I know it costs about $300 but, it’s the best money you’ll spend, you won’t regret it.
- THOU SHALT NOT CHANGE JOBS while home shopping, this also affects your credit score so hang on a little longer, you can do it!
- THOU SHALT SAVE SOME MONEY. Back in the day (like last year) you may have been able to get a 100% loan and maybe get in a house with little or no money. Now, you will have to have some money for a down-payment and closing costs. According to my trusty Loan Officer, a VA loan is probably the only 100% loan left. So save those pennies for a rainy day, like your mama told you!
- THOU SHALT PLAY FAIR. One of the motto’s in the office is “Win-Win or No Deal”, no this isn’t that game show with a guy named Howie! Your goal should be a win/win for both parties. This DOES NOT, repeat DOES NOT mean that you can’t get a great deal on a home. I’ve gotten my clients some bargains, ask them. This attitude just makes the entire process go smoother and easier. It’s not that I’m not up for a challenge, bring it on ….but if you’re goal is to gouge the sellers, squeeze every drop of blood out of the homeowner and go looking for a fight at every turn, be prepared for a very frustrating experience. AND you may not even come out ahead or even get the home you want. Seller’s DON’T have to play with you if they don’t want to (and neither do agents!). Didn’t your mama say “You can catch more flies with honey than with vinegar”?
- THOU SHALT HAVE A GENERAL IDEA OF WHAT YOU WANT. I’m not saying that you have to know which house you want now. No, I am saying you should have a sit-down, heart-to-heart talk with your significant other and come to an agreement about a few basics. How many bedrooms, bathrooms, what area of town, what school district, do you need a formal dining room, fireplace, island kitchen, newer or older home, big yard or small yard, etc. You’d may be surprised how things evolve when you start the dialogue about WANTS and NEEDS!
- THOU SHALT NOT GET TOO BIG FOR THY BRITCHES. As much as I’d LOVE, repeat LOVE to sell you that million or half million dollar home, do you really need it? Can you afford it? Do you need 5,000 square feet? Do you need 5 bathrooms. Do you need a big home for entertaining? Think long and hard how much you want to spend each month and make sure you’ve got money left over for other things in life. There are other things in life you know, like college for your kids, vacations with your family, retirement, you know …LIFE happens! You don’t want to end up hating your home because it takes all of your cash each month with nothing left for anything else. If you’ve got the money and still want to buy that big house, by all means, give me a call!
- THOU SHALT MAKE A MOVE WHEN THE MOVE IS RIGHT. Ok, this is for all of you marathon shoppers out there and those of you who can’t make a decision. You know who you are! When you’ve carefully looked at your options, found a home that has everything (or almost everything, remember no home is 100% perfect) you are looking for, negotiated a great price, JUST DO IT! If you snooze, you lose. Make your move! Then be prepared for “buyer’s remorse” or “cold feet”, you’ll get it, trust me… just turn over and go back to sleep, it will be fine!
There, I know I didn’t cover every technical aspect of home buying but maybe I’ve given you something to think about that you’ve not considered before. Keep in mind, as agents, we do this EVERY DAY so hopefully, I’ve imparted some wisdom.
By Becky Flores; Realtor.com
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For the uninformed, blogging is hitting the Internet today and making a real impact! What is a blog? An easy explanation of this is a WEB LOG or a journal on the web … it’s a place where folks can “voice” their thoughts, share ideas, or comment on those of others. The Boston area now has such a blog where new items of interest will be posted and where comments can be made. Topics can range from those related to real estate and community highlights to local events of interest or anything personal or business related that might be perceived as worthwhile information for public knowledge, discussion and/or use. It’s even possible to subscribe to a blog of interest and receive textual updates on your iPod! Check out the latest updates for the Boston & worldwide Real Estate Blog at:
http://www.suemci.com/blog.asp
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RE/MAX Landmark, 555 Washington St, Wellesley, MA, 02482
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