1.  Home Buyer Credit Act

• DEADLINE: April 30, 2010 (June 30^th with a signed, binding contract).
• ELIGIBILITY: First-time buyers and repeat buyers (those who have owned and lived in one residence for 5 consecutive years of the last 8).
• INCOME LEVELS; $125,000 individual and $225,000 for couples.
• PURPOSE Allows Virginia Beach home buyers to receive a tax credit (which may be claimed on this year’s taxes) of $6500 to $8,000.

***Remember that a tax credit is a dollar-for dollar reduction in what a taxpayer owes. If the credit exceeds the amount owed, a refund will be issued.

2. Home Affordable Refinance Program (HARP)

• DEADLINE: June 2010
  
• ELIGIBILITY: The mortgage loan on your Virginia Beach property must be owned by Fannie Mae or Freddie Mac and owner occupied. Property may include 1 to 4 units. Current mortgage must be paid current and up to date. Loan-to loan value cannot exceed 125% (previously 105%).
• PURPOSE: To extend underwriting guidelines so as to allow “underwater” mortgage holders (those with loan balances which exceed the value of their Virginia Beach home) to avoid foreclosure.

Are you or someone you know behind on your mortgage payments and facing a Virginia Beach foreclosure? You do have options. A foreclosure is not the only way. A short sale may be the answer to saving you, your family and your home. I am a Certified Distressed Property Expert (CDPE). I have the training, knowledge and experience needed to help save your Virginia Beach home from foreclosure. The clock is ticking. Don’t hesitate. Give me a call for a private consultation.

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What’s your Virginia Beach home worth?

Here are a number of money-saving ways to reduce the amount of tax you owe–or even increase the amount of your refund!

First, let me explain the difference between a tax deduction and a tax credit.  A tax deduction reduces (adjusts) your taxable income. A tax credit reduces your tax dollar for dollar. You do not have to itemize deductions to claim a tax credit.

Tax Deductions for Primary Residence

Tax deductions on your primary residence include:

• Interest paid on your mortgage
• Refinancing points paid in 2009
• Real estate taxes
• Interest on major home improvement loans
• Mortgage insurance premiums
• Home improvements required for medical care
• Any sales commission, legal fees, or closing costs associated with the sale of [city] real estate in 2009
  

Home Energy Efficiency Improvements Tax Credits

Consumers who purchase and install specific products, such as energy-efficient windows, insulation, doors, roofs, and heating and cooling equipment in existing homes can receive a tax credit for 30% of the cost, up to $1,500, for improvements “placed in service” starting January 1, 2009, through December 31, 2010. See Federal Tax Credits for Energy Efficiency for a complete summary of energy efficiency tax credits available to consumers.

Residential Renewable Energy Tax Credits

Consumers who install solar energy systems (including solar water heating and solar electric systems), small wind systems, geothermal heat pumps, and residential fuel cell and microturbine systems can receive a 30% tax credit for systems placed in service before December 31, 2016; the previous tax credit cap no longer applies. Details are explained here.

Home Buyer Tax Credit

• First-time buyers who have not owned a home in the last three years are eligible for a credit of 10% of the purchase price, not to exceed $800,000. Ownership of a vacation home or rental property not used as a prime residence does not disqualify a buyer as a first-timer.
• Current home owners, or those who have owned and lived in a principal residence for at least 5 consecutive years of the last 8, may qualify for a credit of up to $6500.

And that’s it for Part I of the tax deductions tutorial for owners of Virginia Beach real estate. The next blog will cover such topics as Educational expenses, Family and Personal deductions, Health and Medical expenses, and reducing your adjusted gross income by declaring taxes paid in 2009.

Also read:

More On New Improved Home Buyer Tax Credit

Virginia Beach Home Buyers Rejoice – Tax Credit Expanded

Don’t wait for next year’s tax refund. Give us call to learn how to use your tax credit towards your down payment and closing costs.

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Homebuyer Tax Credit Plus Details 

The Homebuyer Tax Credit Plus is a combined second mortgage with a VHDA FHA insured first mortgage. The second mortgage can be up to 5% of sales price or appraised value, which ever is less.  No interest and no payments are due on the second mortgage for the first 12 months of the loan.  This provides the homebuyer sufficient time to receive their federal first-time homebuyer tax credit and use it to repay the loan with no costs or penalty. If the second mortgage is not fully repaid during the first 12 months, the balance will be amortized over the remaining 29 years at the same interest rate as the first mortgage.  If partial repayment is made to the second mortgage during the first 12 months, the loan will be re-amortized at the lower balance for the final 29 years. This will result in a lower monthly payment on the second mortgage.

Homebuyer Tax Credit Plus Eligibility Details

Borrowers must meet VHDA’s mortgage revenue bond First-time homebuyer program guidelines including income and sales price limits. Borrowers must also meet Federal first-time Homebuyer Tax Credit requirements.  As a part of the Federal First-time Homebuyer Tax Credit requirements – all loans must close by November 30, 2009.

VHDA Maximum Mortgage/Minimum Borrower Funds

Like the FHA Plus program, the borrower must obtain a maximum VHDA FHA first mortgage.  The second mortgage must be no more than 5% of the lesser of sales price or appraised value – not to exceed funds required by the borrower for downpayment, closing costs, prepaids and discount points.  Borrower cannot borrow funds in excess of what is needed for closing.  Borrower must have the equivalent of 1% of the sales price documented as their own funds in the transaction or in reserves.  POC items paid by credit cards may not be reimbursed to borrower at closing.

Give us a call for more information of this incredible financing for first-time home buyers!

HUD has confirmed that the $8,000 tax credit can be used toward the down payment on FHA loans, but cannot replace the required 3.5% minimum. In other words, you still must put 3.5% down, but can then use the tax credit for additional down payment or for closing costs. You make use of the tax credit money by means of a bridge loan.

Some state housing finance agencieshave developed their own tax credit bridge loan programs, so buyers can monetize the tax credit upfront to cover all or part of theirdown payment. These programs are separate from the HUD program.

Give ua a call to learn how you can use your $8,000 tax credit to your best advantage when buying Virginia Beach real estate!

Learn more aobut Virginia Beach real estate at ButlerTeamHomes.com.

HUD has now rescinded their Mortgagee Letter 9-15 which allowed tax credit loans. They are apparently analyzing the issues with it. It has now been retracted, and the letter removed from the HUD site.  At this point it’s no longer there.. Here is why…

In regards to FHA loans, a borrower can only obtain monies for their actual downpayment of 3.5% by the following :

• Their own funds
• up to 100% of a gift from a relative/family member
• From the Federal, state, and local governmental agencies and nonprofit instrumentalities of government
• FHA approved non-profits 
• monies from their employer in a form of employee contribution
• monies from secured borrowed funds… IE. borrowing equity from your home to buy another home or borrowing against your car that is free and clear or borrowing from your 401-k, etc.

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, has announced the Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a downpayment.

What does this mean for Virginia Beach home buyers? First time home buyers will not have to wait to file their tax return to get the $8000 and will be able to use these funds when they close on their home loans so that the cash can be used as a downpayment. FHA approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans, allowing eligible home buyers to access the funds immediately at the closing table.

This is GREAT news for first-time home buyers who often are tight on cash when purchaing a home. Give us a call today to learn how to take advantage of your $8000 credit.

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It is not the $15,000 credit that was proposed by the House of Representatives, but it is a definite improvement over the $7,500 low interest loan that was in last fall’s legislation. Who qualifies:

First-time Virginia Beach homebuyers who purchase this calendar year get an $8,000 tax credit which does not have to be repaid like a similar measure last year. This phases out for people making more than $75,000 individually or $150,000 jointly. “First-time homebuyer” is defined as someone who has not owned a home for the past three years.

The purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as “first time” buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.

Applying for the credit will be easy – or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.

This legislation does not help the first-time Greenville homebuyer who doesn’t have the cash for a down payment as you have to have closed the deal to qualify. It is more of an $8,000 discount on the price of the home and can give home buyers a cushion for unexpected costs during the first years of homeownership.

Are you a first-time Virginia Beach homebuyer? Give me a call! I am glad to discuss how this new law effects you personally.

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