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Deadline approaching: No more extensions of tax credit for first-time home buyers

December 29th, 2009 6:34 AM

Home buyers hoping to take advantage of a new or extended tax credit should not procrastinate: This third bite at the apple will be the last.

Proponents of the $8,000 credit for first-time buyers and the $6,500 credit for move-up buyers made it clear during the debate on Capitol Hill that the benefits would not be renewed when they expire. And a lobbyist for the National Association of Realtors confirmed that at the group's annual convention last month.

Lawmakers "made us promise practically in blood that we would not come back" for another extension, Linda Goold, the Realtor group's director of tax policy, told her members.

During the debate, Sen. Johnny Isakson (R-Ga.), a former real estate broker and a longtime proponent of the tax credit, promised his colleagues, "This is the last extension."

And Senate Finance Committee Chairman Max Baucus (D-Mont.) said, "It is important that this tax credit does not become a permanent fixture of the tax code."

As it stands now, buyers who meet the income eligibility requirements have until midnight April 30, 2010, to ink a deal and must close by midnight June 30 to qualify.

Many buyers in the Eugene and Springfield Oregon area have taken advantage of the tax credit but there are still a lot that can be helped!

Congress enacted the original $7,500 first-time buyer credit as part of the Housing and Economic Recovery Act of 2008. But because the credit had to be paid back it was more like a no-interest loan than a true credit and there were relatively few takers.

So in the American Recovery and Reinvestment Act of 2009, lawmakers upped the ante to a maximum of $8,000 for new buyers who closed before Dec. 1. They also said the new credit need not be paid back unless the taxpayer moves out within the three-year period following the purchase.

This second attempt at stimulating sales worked so well that the housing lobby implored Congress to help keep the momentum going. So lawmakers extended the deadline for first-timers and added a "long-term resident" tax credit for repeat buyers who owned their current home for at least five consecutive years out of the last eight.

Incidentally, the credit is not a flat $8,000 for new buyers and $6,500 for repeat buyers. It is 10 percent of the purchase price up to those ceilings. There is no credit if the price of the house is above $800,000.

Griswolds reunite for Super Bowl ad

How big is the second-home rental market? It's big enough to support a 30-second TV ad during the broadcast of Super Bowl XLIV on Feb. 7.

The sponsor, HomeAway.com, a site that lists some 425,000 rental properties both here and abroad, won't reveal how much the spot cost. But you can bet it will be a bundle. A 30-second ad for the upcoming contest runs from $1.9 million to $2.5 million, depending on when it appears during the game and other considerations.

The spot, which will reunite Chevy Chase and Beverly D'Angelo, who played Clark and Ellen Griswold in the 1980s comedy classic "National Lampoon's Vacation," will kick off a national campaign aimed at showing the value and benefits of renting vacation homes as opposed to hotel rooms or condo apartments.

The first-time Super Bowl advertiser is hoping to reach the more than 100 million people who watch the big game, many of whom tune in just to see the commercials, with the message that vacationers can rent a whole house for half the cost of a hotel room.

The biggest part of the deal is not the Super Bowl but licensing the movie and its characters from Warner Bros., says Brian Sharples, HomeAway's chief executive. "There's a lot of nostalgia for bringing back the Griswolds."

In the film, Clark and Ellen Griswold take their children on an ill-fated cross-country road trip to the fictional theme park Wally World.

What are your options? Better than you think! Call me and I will help develop your custom home purchase plan.

Eric

541-543-0893

Posted by Eric Nichols on December 29th, 2009 6:34 AMPost a Comment (0)

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How to buy a home that needs work and get the government to pay for it.

December 31st, 2009 10:33 AM

Have you ever heard of the 203K program? Surpisingly, most people in the Eugene-Springfield area are unaware of this when they look to purchase a home. Here are the basics on how it works:

Only 31/2% down payment required, which can be gifted by family members

More flexible qualification requirements allow those with less than perfect credit to purchase a home at competitive rates

A single loan for both purchase and improvement of your home means you make only one loan application and pay one set of closing costs – saving you time and money

FHA loans are assumable and there are no prepayment penalties

An FHA Energy Efficient Mortgage (EEM) can allow you to qualify for a larger mortgage to add additional improvements that will lower your utility expenses.

By including cost of renovation in your home mortgage, you pay for these improvements over time at a much lower interest expense than conventional alternatives

Rather than paying a premium for a home in “perfect” condition, take advantage of the great prices available on foreclosures or other homes on the market that are in need of repair or remodeling

Instead of paying for a previous owners improvements you may not desire, invest instead in exactly the features, colors, styles, etc. that suit your tastes and needs

Enjoy the opportunity to live in an up-to-date home in a great location closer to work, shopping, cultural activities and more.

Its easier than you think when you use a mortgage provider that is well trained in how to help.

Posted by Eric Nichols on December 31st, 2009 10:33 AMPost a Comment (0)

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IRS delays with the $8000.00 tax credit

December 14th, 2009 6:04 AM

Millions of first-time homebuyers scrambled into the market, hoping to grab an $8,000 tax credit. But IRS delays are making it tough for consumers.

After buying a five-bedroom home in Brooklyn Center, Mich., Mike and Deb McIlheran expected an eight-week wait for their $8,000 first-time-homebuyer tax credit. That turned into 20 weeks.

"Why extend a program that the government isn't paying on NOW?" said McIlheran, 52, who works as a driver in the funeral industry. "We lived on beans and wieners ... every penny went into the down payment."

Millions of home seekers have scrambled into the market, pushed by the $8,000 and $6,500 homebuyer tax credits.

The credits, extended in November through mid-2010, have been touted by everyone from Realtors to senators as a way to give the economy a needed boost. But to get the money, homebuyers have to amend their 2008 tax returns or wait to claim the credit on their 2009 taxes. Delays in the time it's taking for the IRS to review amended 2008 tax returns and cut checks is making it tough for consumers to spend the money on new couches, flat-screen TVs and storm windows.

The delays trouble U.S. Sen. Amy Klobuchar, D-Minn. She sent a letter to the IRS inquiring about the long waits and what's being done.

"The full and immediate economic impact of the tax credit is lost when it takes up to four months for people to get the money due to them ... such lengthy delays are unacceptable and erode the public's trust in the competence of the government," she wrote.

IRS spokeswoman Carrie Resch said the agency cannot comment on specific taxpayer cases. But she acknowledged the agency is seeing a higher volume of amended tax returns than anticipated, though she would not attribute the backlog directly to the homebuyer tax credit. Amendments might also be up because of other recent tax-law changes, she said.

As of mid-September, more than 1.4 million taxpayers had requested the credit by amending their federal tax returns.

Because amended returns are reviewed by hand and the volume is so high, the IRS has extended the processing time frame for amended returns to 12 to 16 weeks, from eight to 12 weeks.

Posted by Eric Nichols on December 14th, 2009 6:04 AMPost a Comment (0)

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