First-Time Homebuyer Tax Credit

I hope you had a great weekend and had some time to spend with your friends and family. As I'm sure you are aware, President Obama has signed the $787 billion economic stimulus bill into law and it's now official. I have been receiving a lot of questions specifically about the First-Time Homebuyer Tax Credit, which is part of this bill. In order to help with some of the confusion, I have provided a list of FAQs below.

Q: How much is the First-Time Homebuyer Tax Credit for?
A: $8,000 or 10% of the purchase price of the home, whichever is less.

Q: What types of property does the credit pertain to?
A: Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence.

Q: Is there a limit based on your income?
A: Yes. The full credit is available for individuals with an adjusted gross income of $75,000 ($150,000 for joint filers). The credit phases out above those caps ($95,000 and $170,000 respectively).

Q: Does the credit only apply to first-time homebuyers?
A: Yes. The purchaser (and purchaser's spouse) may not have owned a principal residence in the three years prior to purchase.

Q: Do I have to repay the tax credit?
A: No. There is no repayment for purchases on or after January 1, 2009 and before December 1, 2009. However, if the home is sold within three years of purchase, the entire amount of the credit is recaptured on sale.

For additional information on how the stimulus can help you, click here. You can also find detailed information on the First-Time Home Buyer Tax Credit on a website launched by the National Association of Home Builders.

Fannie Mae & Freddie Mac Fee Increase

Fannie Mae and Freddie Mac are both toughening their credit score and down-payment rules as of April 1st. Some lenders are already factoring in the higher fee, which reduces the effectiveness of the stimulus efforts. Under the new guidelines, buyers with down payments of less than 25% will be charged a three-quarter point add-on penalty, no matter how high their credit score. Buyers of duplexes, where one unit is owner-occupied and the other is rented, will be charged a 1% add-on. Refinancers who take cash out will be charged as much as three points if they have a low to moderate equity stake.

This will definitely not make it any easier to get a mortgage. Actually, it will do the opposite. To read more about the fee increase, click here.

Welcome!

This is my first post on my blog titled "Bryan's Blog". I know...how original! As I didn't want to limit the scope, I decided to keep the title very general. With that said, I intend to write about different experiences in my life along with information pertaining to real estate, mortgages, the economy and probably much more. We'll see how it goes...

Thank you for taking the time to visit my blog and feel free to contact me anytime if you have any questions or if you just want to chat.