What are you waiting for?

 Congress just made it $7,500 easier to buy a home!

 Don’t miss this opportunity of a lifetime!   

The New Federal Home Buyers Tax Credit bill will provide couples with income up to $150,000 a $7,500 tax credit if they have not owned a home in the past three years. Single persons earning $75,000 per year also will be eligible.

Details of the program may be found on line at www.federalhousingtaxcredit.com. When you read about this opportunity there will be questions. I’ll point out a few things that you may wonder about.  

The $7,500 actually is CASH. If you owe no additional tax when you file your return in 2009 you will receive a $7,500 check from IRS. Suppose you owe $500 when you file your taxes. You will not send the $500.00 but will receive a check for $7,000 from the IRS.  

How does that help me to buy a home now? We have obtained an opinion that the IRS has no problem with a person or couple borrowing against expected refunds. As you probably have seen in advertisements, some tax preparers have been making such loans but charging fees and sometimes high interest rates. We plan to offer such loans with no interest until the refund is due, subject to lender approval. We have been in contact with the National Home Builders Association legislative team and they are working on this very thing. Our hope is that all lenders and insurers of mortgages will allow this type of loan by builders and not penalize the buyer by considering this debt in the qualifying process. What it will do for the buyer, if approved, will be to reduce the amount of the mortgage, reduce the monthly payment, and give additional equity instantly. Any time you can reduce the amount you must borrow you save money.  

Sometimes we see parents or grandparents willing to help the first time homebuyer. Consider making the $7,500 loan or any portion of it and getting your money back next spring from the homebuyer.  

What if I own a manufactured home? You are considered a first time homebuyer if your home was financed as a manufactured home. I believe that if your manufactured home was financed by a mortgage as in a home and land package you may not be eligible for the credit.  

What if I own my land, wish to purchase land, or expect to receive a gift of land?

The solution to that problem is for the deed to go to builder, the builder uses his money or credit to complete the home, and the builder then sells it to the homeowner. Be very careful in whom you trust as your land is at risk! Also, time is a factor as whatever you do as you must close by July 1, 2009. Time is of the essence if you plan to build.  

What if I have a lease on a home or apartment? It is unlikely you could loose $7,500 by breaking the lease and most Home Builders and Realtors can advise you on that. Take a copy of the lease to your builder or agent and the mortgage company.  

Will this program be available later? I would not bet on it. Many material prices are low and trades people need work. As soon as demand picks up you can expect rising prices and increased values. This is truly a once in a lifetime opportunity. If you are taking the tax credit remember the government does not give much away. The $7,500 actually is an interest free loan repayable over 15 years. Still, it’s a great opportunity but make sure the tax credit reduces your loan amount. The only way you can loose is if you receive the tax refund and blow the money on something else. Are you smarter than a fifth grader?   

NOW IS THE TIME TO BUY!!!