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"While it's mainly for first-time homebuyers, it's also for anyone who's owned their home for five years or more or lived in their home for five of the last seven years," he said.

The time is near!

The end is near. For those of us wanting to take advantage of the first time buyers credit of $8000 or the move up buyer credit of $6500, we need to get moving. Without an extension, clients need to have a signed, completed purchase contract by April 30th and be ready to close on their purchase by June 30th to take advantage of this excellent program.

If you or anyone you know is looking for a new home, now is the time!

Call me and we can discuss the particulars!

The GFE is the form you receive from a lender that gives you some sense of how much cash it will take to finance or refinance real estate. Unlike the old form, the new one explains what lender fees can be changed, not changed or changed by no more than 10 percent.

No less important, the new form shows the cost to originate the loan - a cost that must include any yield spread premium.

Yield spread premiums can be good for borrowers when properly used. For instance, you might get a somewhat higher interest rate for a mortgage if the lender will pay some or all of your closing costs. That can be a good trade-off to save up-front cash.

The problem is that mortgage pricing is complex and some borrowers unknowingly pay higher rates but get no benefit. As an example, the Wall Street Journal says 61 percent of the subprime borrowers financed in 2006 actually qualified for better loans and lower rates. (See: "Subprime Debacle Traps Even Very Credit-Worthy," Dec. 3, 2007)

With the new GFEs borrowers will be able to easily see mortgage costs, and they will be able to compare loans from different lenders. No less important, the numbers from the GFE plug into the new HUD-1 tally sheet used at closing. Borrowers will be able to immediately compare the rates and terms promised with the rates and terms that have been delivered.

Copies of the new forms, as well as point-by-point explanations, are available upon request. Just email me today!

Credit Q&A

Here in the Eugene Springfield community of Lane County, many first time buyers have taken advantage of the $8000.00 tax credit, which is essentially free money. Now with the addition of the $6500.00 move up credit even more buyers are starting to shop.

The hiccup is this: When the old tax credit expired in November, the forms to submit to the IRS expired as well. As of yet we are waiting on the IRS to introduce a new form and instructions for claiming the credit. I will continue to monitor the situation and provide information as I get it.

I wish a great week for all my neighbors in The Eugene Springfield area.

Since Congress passed the tax credit last February as part of the stimulus program, more than 1.4 million buyers have scrambled to take advantage of it, according to the IRS.

All they had to do was file an amendment to their 2008 tax returns (the ones they filed last spring) and claim the promised refund of 10% of the purchase price -- up to $8,000.

"I closed on a Friday and I filed an amendment to my taxes on Monday," said Valatisha Jacinto, who purchased her Waco, Texas, home last March.

But that all changed on Nov. 6.

One CNNMoney.com reader wrote: "I bought a new home to get the $8,000 tax credit like many others. However the IRS has NOT ALLOWED ANYONE TO FILE since November 6th!! It has been over 2 MONTHS!!"

He's right. Nov. 6 marked the date that the rules changed because an extended -- and expanded -- version of the homebuyer tax credit went into effect. And that put filing for the credit on hold.

Originally, the credit was just good for first-time buyers and was slated to end on Nov. 30. But Congress extended the credit to include contracts signed by April 30 and closed by June 30. It also made a refund of up to $6,500 available to existing homeowners looking to buy something new.

And that marked the start of a new IRS paperwork wrangle.

Those homeowners who closed their sale before Nov. 6 use Form 5405 to claim the credit right away. But those closing after that date are in limbo because no form yet exists for them to file.

The IRS had been expected to come out with a revised form by early January, but it has yet to release anything.

Robert Dietz, an economist with the National Association of Home Builders who has been monitoring the situation, said the delay may be caused because numerous parties, including the Treasury Department, have to agree on how to process all the new documentation that the expanded tax credit requires. Whereas before, all you did was file a form saying you'd bought a house -- no proof required.

Now, for example, existing homeowners buying new places must provide proof that they owned and resided in their previous homes for at least five of the past eight years.

"They may just be making sure all their i's are dotted and their t's are crossed before they release it," Dietz said.

Even after the new form is ready, new filers will still face delays. Anyone who wants to claim their first-time homebuyer tax on their 2009 taxes (the ones being filed now through April 15) can't do it it electronically. That's right: Back to paper filing.

Part of that change is because the IRS has become more concerned about fraud as it discovers more people claimed the tax credit without actually purchasing property.

In October, a tax preparer, James Otto Price III, was the first person convicted of this crime. He falsely claimed the credit for 15 clients.

"Because of the scams, the IRS started sending back the amended returns and asking for proof," said Mary Mellem of David & Mary Mellem, EAs & Ashwaubenon Tax Professionals.

The IRS, she said, now requires a signed copy of the settlement statement ( HUD-1), plus a signed mortgage statement with the new address and a copy of either the taxpayer's drivers license, bank statement or pay stub, showing the new address. That paperwork slows the process.

"The system has no way of sending along the documents they're requiring," said Mellem. "Taxpayers must file a paper return instead."

The IRS points out that taxpayers can still use the electronic forms available on its Web site; they just have to print them out, attach the proof and mail everything in. And that can take quite a while.

"Taxpayers are looking at another three months before they get their returns," said Mellem. 

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:

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

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

A number of experts agree that the bottom has hit in pricing on homes. In some parts of the country the market will remain soft, but here in Lane County we are actually seeing much shorter times on the market for home sellers in the median price range of $165,000 to $260,000.

The extension and expansion of the housing credit into 2010 is continuing to drive the market. We have seen a dramatic increase in the number of first time buyers and now with the credit being offered to move up buyers as well, we will see even more people that have been on the fence will choose now as the time to buy.

With interest rates still holding below 5% our buyers have more purchasing power than ever before, making their "dream home" attainable.

The predictions of limited Mortgage money being available have turned out to not be true, in fact there are still a number of banks that are doing loans in the lower credit score ranges and showing great flexibility with buyers in finding the right program to fit their needs.

Please feel free to call or email me for more information on this tremendous opportunity.

Have a great week!

Eric Nichols

541-543-0893

enichols@fcmapproved.com