IRS Update First Time Homebuyers

IRS Updates

First Time Homebuyer Credit: Reminders & News From HUD
The Recovery Act extends the credit for purchases closing before December 1, 2009. For purchases in 2009 the credit amount increases to $8,000 and the credit does not have to be repaid provided the taxpayer resides in the home for three years. Full article here: http://www.irs.gov/newsroom/article/0,,id=204671,00.html

Also see First-Time Homebuyer Credit Questions and Answers: Homes Purchased in 2009. The following question has come up frequently:

Q. I am in the process of buying a home. I expect to close the deal before December 1, 2009. Can I claim the first-time homebuyer credit now? That would allow me to use the refund for a down payment.

A. No. You may not claim the credit in anticipation of a purchase that has yet to happen. Until you have finalized the purchase of your home, which for most purchasers occurs at the time of the closing, you do not qualify for the credit. IRS news release 2009-27, First-Time Homebuyers Have Several Options to Maximize New Tax Credit, contains details for filing options if the home is purchased after April 15, 2009.

NOTE: HUD recently announced details on new FHA rules allowing state Housing Finance Agencies and certain non-profits to 'monetize’ up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate.
See the HUD news release here: http://portal.hud.gov/portal/page?_pageid=153,8026931&_dad=portal&_schema=PORTAL
To read the FHA's new mortgagee letter, visit HUD's website.

First Time Homebuyer Credit Update

HUD Secretary announces that the $8,000 tax credit may be used as a down payment!
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Developed told REALTORS® gathered in Washington, DC last week for the NAR Midyear meetings that the Federal Housing Administration will permit its lenders to allow homeowners to use the $8,000 as a down payment.
Secretary Donovan said that important changes, which NAR has been calling for, will help consumers purchase a home. “We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a downpayment,” Donovan said. According to Donovan, the FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.
For indepth information on the First Time Homebuyer credit click here.

Foreclosure Rescue Scams

Bank Regulators Warn Consumers about Foreclosure Rescue Scams
The Office of the Comptroller of the Currency (OCC, the federal regulator of national banks) and the Office of Thrift Supervision (OTS, the federal regulator of savings associations) have both issued flyers warning consumers about foreclosure rescue scams. Both flyers provide concrete, practical advice on avoiding the kinds of high pressure tactics and abusive practices engaged in by the scammers. Families with equity in their homes are particularly at risk, but anyone paying for these services is likely to be sorry. Free counseling is available from HUD-approved counseling agencies.

OCC: Consumer Tips for Avoiding Mortgage Modification Scams and Mortgage Rescue Scams >

OTS: Foreclosure Rescue Scams/How to Avoid Becoming a Victim >HUD-Approved Counseling Agencies >

Help For Homeowners, Are You Eligible??

Find out if you qualify for help with your mortgage. This is the official website, and it is very easy to navigate. Get the answers that you need now...

http://www.makinghomeaffordable.gov/

Straight To The Source

If you want to skip the hype, opinions, and debates about what is going on in the Obama Administration you can go straight to the source on the white house website. There is a variety of information, including the daily blog, found in the "Briefing Room." As you will see, this is HUGE, and extremly informative. http://www.whitehouse.gov/openforquestions/

Free Annual Credit Report

The government offers a FREE annual credit report. But don't be fooled by any other site or service that makes this offer. They can be teasers or scams. There is only one address that makes this legitimate offer on their secured website. Type the address directly into your browser to ensure that you have gone to the right site... https://www.annualcreditreport.com/

New Home Buyers Tax Credit Revised

February 5, 2009

Last evening the United States Senate unanimously passed a bipartisan
amendment, offered by REALTORR Champions, Senators Johnny Isakson (R-GA) and
Joe Lieberman (ID-CT) to the Economic Stimulus Bill creating a $15,000 tax
credit to individuals who purchase a home in the next year.

Specifically, the Isakson-Lieberman amendment to the pending economic
stimulus bill would provide a direct tax credit to any homebuyer who
purchases any home. The amount of the tax credit would be $15,000 or 10
percent of the purchase price, whichever is less. Purchases must be made
within one year
of the legislation's enactment, and the tax credit would not have to be
repaid.

The amendment would allow taxpayers to claim the credit on their 2008 income
tax return. It also seeks to prevent misuse by only allowing purchases of a
principle residence and by recapturing the credit if the home is sold within
two years of purchase. The amendment would sunset the current $7,500
housing tax credit on the date of enactment.

While the final details of the Stimulus Bill are still being debated, this
amendment represents a tremendous step forward in NAR's efforts to stabilize
housing markets around the nation. Because of the efforts of REALTORSR, we
expect the final Economic Stimulus Bill will contain several major
housing provisions. We will continue to update you as the bill progresses
through the legislative process.