NEWS FLASH!
Home Buyer Tax Credit Extended
Congress today approved legislation that will extend the first-time home buyer tax credit beyond its Nov. 30 deadline and expand it to a wider group of home buyers.
The legislation, which will be signed into law shortly by President Obama, will extend the $8,000 credit for first-time home buyers for sales contracts entered into by April 30, 2010 and closed by June 30.
Further, it has been expanded to include a new $6,500 credit for owners of existing homes who are purchasing a new primary residence. An existing home owner can claim the $6,500 tax credit if they have been residing in their primary residence for five consecutive years out of the last eight.
In more good news, the income eligibility limits to claim the full credit amount for both groups of home buyers have been raised from $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return to $125,000 for individuals and $225,000 for married couples.
FHA To Toughen Down Payment Rules
Daily Real Estate News | January 20, 2010 |
The Federal Housing Administration will raise the minimum down payment for its least credit-worthy borrowers, agency announced Tuesday.
Borrowers with credit-rating scores below 580 will be required to put down at least 10 percent. Those with a credit score above 580 will be able to continue to put down only 3.5 percent. The changes are intended to shore up the agency's finances.
The FHA also will increase its upfront mortgage insurance premium from 1.75 percent to 2.25 percent. The agency is expected to seek congressional approval to raise annual mortgage insurance premiums, paid by borrowers over the life of the loan, above the current 0.55 percent maximum. The amount it will seek has yet been announced.
Source: Reuters News, Corbett B. Daly (01/19/2010)
Assistance for Home Buyers
Down Payment Assistance Program
Summit County offers a down payment assistance program that may be of benefit for those home buyers who qualify. Check out the link in the left column of my website to get a printable flyer that explains the program and provides contact information.
In summary, the program offers a $3.00 to $1.00 match for down payment and closing costs. It comes in the form of a loan that must be repaid when you sell the home, no longer use the home for your principal place of residence, or in forty (40) years from the issuance date of the mortgage.
Welcome Home Program:
Funds are available for homebuyers through the Welcome Home Program. These funds may be used by any home buyers who qualify under income levels based on family size.
Below you will find a brief summary of the Welcome Home Program. For more details, you can go to www.fhlbcin.com
Welcome Home funds may be used to fund down payments and closing costs when you purchase your home. You must occupy the home as your primary residence and have income that falls within the low and moderate income levels.
Lenders participating in the Welcome Home Program will have funds available beginning May 1, 2009.
Funds may be used only to assist households whose incomes are at or below 80% of the income limits adopted by the appropriate state housing finance agency (and are adjusted for family size).
Homebuyers must contribute at least $500 of their own funds toward down payment and closing costs (60% of these funds may be received as a gift). This requirement is waived if the homebuyer is disabled (additional documentation may be required).
First-time homebuyers must complete a homebuyer counseling program. The counseling program must cover the following:
- Mortgage financing
- Credit-worthiness
- Household budgeting
- Home maintenance
Counseling is not required of other home buyers.
The loan will be forgiven over five years, at a rate of $1,000 a year. In other words, a home owner who used Welcome Home funds to purchase a home and received a $5,000 grant must occupy the home for no less than five years in order to have the entire amount of the grant forgiven. Selling the home in less than five years may require the home owner to pay back a portion of this grant.
Contact your lender to see if they participate in the Welcome Home program.