First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.
What are the Income Caps?
The amount of income someone can earn and qualify for the full amount of the credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible
Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
What is the Maximum Purchase Price?
Qualifying buyers may purchase a property with a maximum sale price of $800,000.
What is a Tax Credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.
How Much are First-Time Homebuyers (FTHB) Eligible to Receive?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.
Who is Eligible fort FTHB Tax Credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible.
This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.
As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.
How Much are Current Home Owners Eligible to Receive?
The tax credit program includes a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Can Homebuyers Claim the Tax Credit in Advance of Purchasing a Property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.
Can a Taxpayer Claim a Credit if the Property is Purchased from a Seller with Seller Financing and the Seller Retains Title to the Property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Some examples of this would include a land contract or a contract for deed.
According to the IRS, factors that would demonstrate the ownership of the property would include:
1. Right of possession,
2. Right to obtain legal title upon full payment of the purchase price,
3. Right to construct improvements,
4. Obligation to pay property taxes,
5. Risk of loss,
6. Responsibility to insure the property, and
7. Duty to maintain the property.
Are There Other Restrictions to Taking the FTHB Credit?
Yes. According to the IRS, if any of the following describe a homebuyer’s situation, a credit would not be due:
Can Homebuyers Purchase a Home from a Step-Relative and Still be Eligible for the Credit?
Yes. As long as the person they buy the home from is not a direct blood relative, the purchase would be allowed.
If a Parent (Who Will Not Live In The Property) Cosigns for a Mortgage, Will Their Child Still be Eligible for the Credit?
Yes, provided that the child meets the other requirements for the tax credit.
]]>
I recently asked some friends at our corporate office to give me an update on the good news of our companies stellar growth and was made aware of a press release that I missed a few months ago. It does a great job of telling the story of our most recent burst of growth.
DESPITE STRUGGLING ECONOMY,
PRIMARY RESIDENTIAL MORTGAGE BREAKS NEW RECORDS
SALT LAKE CITY, UT – MAY 4, 2009 –
Primary Residential Mortgage has recently broken several personal company records and continues to climb upwards despite a struggling economy.
In April 2009, PRMI reports more than a half-billion in underwriting volume with more than $770 million in application volume. Throughout more than 240 branches and divisions nationwide, approximately 2,325 scheduled loans were funded.
In addition to achieving record breaking volume, Primary Residential Mortgage’s CEO, Dave Zitting, reported the company has received final approval for an additional $300 million in warehouse capacity expansions per month.
“This new line of warehouse capacity will allow us to grow into the next phase, producing more than $8.4 billion annually,” said Zitting. “I believe at this point in time PRMI will be one of Top 15 Mortgage Bankers nationwide – this includes institutional banks.”
As PRMI expands, the Corporate staff has grown with the addition of 51 new employees this year. Senior Management has recently been rearranged with the addition of Tom Gyuro as Chief Strategy Officer; Chris Jones as the Senior Vice President of Business Performance, and the promotion of Ruth Green to Senior Vice President of Operations.
ABOUT PRMI
Headquartered in Salt Lake City, Utah, Primary Residential Mortgage, Inc. (PRMI) was founded by Dave Zitting, Jeff Zitting, and Steve Chapman in 1998. Serving all segments of the market, PRMI is a privately-held, debt-free company that focuses primarily on the retail production of traditional mortgage products. Since its inception, PRMI has evolved into a nationwide multi-billion dollar operation with 1400 employees working in over 240 branches. The company is licensed in 47 states. Branches operate under the PRMI brand or as DBAs as part of PRMI’s division program.
CONTACT INFORMATION
Dave Zitting
President and CEO
Primary Residential Mortgage
800-255-2792 ext. 1113
Melissa Oveson l Marketing Communications Specialist
Primary Residential Mortgage, Inc.
4750 West Wiley Post Way, Suite 200 l Salt Lake City l Utah l 84116
Toll Free 1.800.255.2792 ext. 1113 l Fax 1.801.533-3035
]]>According to a California Assoiation of Realtors survey, 40 percent of first-time buyers would not have purchased a home without the tax credit.
They go on to state that the IRS counts 1.4 million people taking advantage of the credit with more than 10% of the credits (about 160,000) being distributed to Californians.
As we seem to endlessly state, the deadline to make use of the credit is coming quickly with all escrows needing to be finalized by Dec 1, 2009. Hurry! ;)
]]>Here is a bit of the article in case you missed it....
]]>... few places beat Sacramento, according to a new report from the California Association of Realtors.
CAR says 80 percent of Sacramento County first-timers could afford a median-priced entry-level home in the first quarter of 2009.
The same quarter in 2008 it was 65 percent – considered then to be amazing.
Only the high desert region of Southern California and the San Joaquin Valley's Merced County – which has seen a median entry-level price tumble to an astonishing $89,040 – were more affordable than Sacramento County. (Median is where half the homes cost more and half less.)
In California, 69 percent of buyers could afford a median-priced entry-level house at $213,040, CAR said.
The report, issued Thursday, pegged Sacramento County's entry-level median at $143,870, requiring a qualifying income of $25,720 based on 10 percent down and a 4.96 percent interest rate. Sacramento County tends to do well in CAR's affordability index with its relatively good public-sector salaries and its inland California home values.
Median sales prices for all existing homes sold in Sacramento County have dropped by a third in the past year to $160,000, according to researcher MDA DataQuick. They're off 57 percent from an August 2005 high of $374,000.
Just in case you didn't hear yesterday, the Obama administration has worked to encourage HUD to permit the use of the $8000 new home buyer tax credit as a downpayment.
Read NAR's the press release below for more detail....
===================================
]]>Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said that the Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a downpayment.
Donovan’s remarks came in an address to several thousand Realtors® gathered this morning at The Real Estate Summit: Advancing the U.S. Economy, a special daylong session at the Realtors® Midyear Legislative Meetings & Trade Expo here.
Secretary Donovan said that important changes, which the National Association of Realtors® 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.
Donovan said the Obama administration plans to further stabilize the housing market. “I do think we have some early signs hat the market overall is stabilizing,” said Donovan. “Since January we’ve seen both home sales moving up and down around a relatively stable number and we are seeing the first signs that the rapid decline in home prices is starting to abate.”
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said, “As the leading advocate for housing issues and homeownership, NAR continues to take a leadership role in promoting ideas for improving our economy by stabilizing the housing and real estate markets. Today we have the best of the best to begin a dialogue, develop solutions and initiate action toward real estate and economic recovery.”
The morning session included a panel discussion that was moderated by CNBC’s Ron Insana. The 13 panelists and Realtors® in attendance examined cutting-edge solutions necessary to promote and preserve homeownership and real estate development, stimulate the economy, and protect the nation’s taxpayers. They also shared their ideas on what the role and responsibility of the federal government is in the revitalization effort.
The list of distinguished panelists include Dr. Martin Feldstein, professor of Economics from Harvard University; Dr. Barry Bluestone, professor of Political Economy from Northeastern University; John Taylor, CEO of the National Community Reinvestment Coalition; Maria Kong, president of the National Association of Real Estate Brokers; and Sarah Rosen Wartell, executive vice president for the Center for American Progress.
“Right now the Federal Reserve is the market,” said Jay Brinkman, chief economist for the Mortgage Bankers Association. “What will be the effect when the Fed stops buying?” Brinkman explained that an exit strategy must be planned for the long-term; the federal government cannot continue to support the mortgage markets indefinitely.
“We must make sure FHA and the GSEs are supported,” added the Wharton School’s Susan Wachter.
“We are thrilled that so many high-caliber individuals were able to join us today at this important meeting to promote stability in the housing market and the U.S. economy,” McMillan said. “We look forward to an ongoing dialogue and action toward this goal, during our midyear meetings this week and beyond.”
Still want more data....here is the article.
By Inman_News
Created 2009-03-27
Most prospective first-time homebuyers know interest rates are low and believe that homes are affordable. But nearly half don't know about the $8,000 tax credit available to first-time homebuyers through the end of November, and three in four say it's hard to get a loan.
Those are some of the key findings of a survey of 1,000 prospective first-time homebuyers conducted in early March for Century 21 Real Estate LLC.
Only people who said they were likely to buy a first home in the next two years were included in the survey, with about one in four saying they planned to purchase in the next six months.
While 42 percent of those surveyed said they'd be comfortable buying a home in the current market, 48 percent said they are waiting for prices to go down further.
Among renters, 91 percent said they would be likely to buy a home in the next six months if they found an acceptable home with monthly mortgage payments within $250 of their current rent.
About 85 percent of all of those surveyed said they consider current home prices to be affordable, and 68 percent think now is a better time to buy than six months ago.
Among those looking to buy in the next six months, 69 percent said they were worried about home prices rising if they didn't act soon.
But three out of four potential first-time homebuyers think it's difficult to get a loan, and only 41 percent were aware of a first-time homebuyer tax credit that's available [1] through the end of November.
The credit -- equal to 10 percent of the purchase price up to a cap of $8,000 -- is available to anyone who meets income eligibility limits and hasn't owned a primary residence in the last three years.
Whether they'd heard about the credit or not before being surveyed, 77 percent said it would make them more likely to buy a home in the next six months.
Interest rates on loans eligible for purchase or guarantee by Fannie Mae and Freddie Mac have hit historic lows, although borrowers seeking loans too large or risky for Fannie and Freddie may pay higher rates (see story [2]).
While only 62 percent of those surveyed said they think mortgage rates are lower than a year ago, 72 percent said rates are affordable or very affordable.
Nevertheless, half of those looking to buy in the next six months said they were worried about coming up with enough money for a down payment, and 68 percent said getting an affordable mortgage was a concern.
Concerns about the economy were also a factor, with 90 percent saying they were worried or very worried. But 78 percent think it's a good time to buy.
Fifty-eight percent of those looking to buy in the next six months said they worried they would no longer be able to pay their mortgage if they lost their jobs or were forced to take a pay cut.
"Our research shows that while consumers still have concerns about the future of the economy, many are actively considering their options as we move into the spring selling season," said Tom Kunz, Century 21 Real Estate president and CEO, in a press release summarizing the survey's results.
Homebuyers who have a stable job history of at least two years, solid credit (620 and above) and down-payment money as minimal as 3.5 percent on FHA-guaranteed loans "are well positioned to secure a mortgage" today, said Marshall Gayden, senior vice president of Century 21 Mortgage.
Quality schools and proximity to work and stores, restaurants and parks are often said to be key considerations for buyers, though those factors were less likely to be rated "very important" by those surveyed than a home's price and condition, the safety of the neighborhood, property taxes, and yard size.
Nearly six in 10 potential buyers rated their understanding of the process of buying and selling a home as only "fair" or "poor." But when asked who they would turn to for advice about purchasing or searching for a home, those under 40 were more likely to identify their parents than a real estate agent, spouse, neighbor or coworker.
Most potential first-time buyers said they'd browsed real estate listings (66 percent), talked to friends or family (60 percent), and conducted research online (58 percent).
Real estate company Web sites were identified most often (53 percent of those surveyed) as a source of information when you need advice on purchasing or searching for a home, followed by aggregator sites like Realtor.com, Trulia and Zillow (43 percent), real estate company offices (42 percent), newspaper and magazine articles (38 percent), word of mouth (37 percent), and books on real estate (21 percent).
While many real estate professionals believe newspaper advertising has been providing diminishing returns in recent years, more than half of prospective first-time homebuyers said they turn to or expect to turn to newspapers for listings.
Real estate company Web sites were identified as a top source of information for listings (for-sale properties), at 64 percent, followed by newspapers (55 percent), online classifieds including Craigslist (43 percent), real estate yard signs (42 percent), aggregator Web sites (41 percent), and real estate company offices (39 percent).
Listen to the article here
]]>