NEW AND IMPROVED HOUSING TAX CREDIT

According to the National Association of Realtors, this is how the whole first time buyer tax credit scenario is going to play out: 

So here’s what we have achieved: 1) the loan limits will be raised to $727,000 in high cost areas, 2) the tax credit will be raised to $8,000 with NO payback [a true credit], 3) interest rates have come down 125-150 basis points, and 4) the bill has over $50 billion in it for foreclosure mitigation, with Geitners Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES’s thereby freeing them up to do the same with new mortgages, and Fannie has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10.In addition, we preserved what we have - which some tend to forget is always on the table when these negotiations start up again - mortgage interest deductability, real estate tax deductability, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects).


The Loan limits have to do with FHA loans.  Remember to check with your lender regarding which areas are considered “high cost areas”.  The $8,000 tax credit (I believe it is $7,500 for an unmarried individual) will not need to be paid back.  This will apply to homes bought January 1, 2009 through at least December 31, 2009.  Also, if you previously owned a home, but have been renting for awhile, check with your lender to see if you qualify as a “first time home buyer”. 

So, if you are thinking at all about buying, now’s the time.  I would love to help you within the Phoenix metropolitan area.