Victory for the home buyer!

The Senate and House voted in favor of extending the first-time homebuyer tax credit. As you know, the legislation extends, through April 30, an $8,000 first-time homebuyer tax credit and creates a new $6,500 credit for homebuyers who have been in their current residence for the last five years or more.

The Senate unanimously voted Wednesday night (98-0). The House just passed the bill this afternoon (Thursday, November 5th) (403-12).

President Obama is expected to sign the legislation tomorrow, Friday, November 6.

Housing Tax Credit Extended!!!

Washington (CNN) — Senate leaders have reached a tentative deal to extend the first-time homebuyers’ tax credit that was originally passed earlier this year as part of the stimulus bill, Republican and Democratic sources told CNN on Wednesday.

The agreement would extend and expand the credit to include current homeowners who want to move, according to the sources.

The original credit in the stimulus bill is set to expire at the end of November and offers a tax credit of $8,000 to first-time homebuyers.

Senate sources told CNN they have tentatively agreed to extend that $8,000 credit for first-time buyers until the end of April. In addition, they are adding a $6,500 credit for some current homeowners who buy a new residence by then.

To qualify, current homeowners must have lived in their primary residence for five continuous years.

Senators have not agreed on how the tentative deal would come up for a vote, but sources from both parties said they are considering adding the housing credit to a bill that would extend unemployment benefits.

House Speaker Nancy Pelosi has indicated she also is interested in extending the homeowner credit, but House leaders have yet to endorse any one bill.

47 Blaine St, Brockton, MA | Powered by Postlets

47 Blaine St, Brockton, MA | Powered by Postlets

Shared via AddThis

First-Time Homebuyer Tax Credit in Detail

Below are important points about the new 2009 First-Time Homebuyer Tax Credit.

The homebuyer tax credit is one of 10 key provisions of the American Recovery and Reinvestment Act signed into law by President Obama on February 17, 2009.

The bill provides for an $8,000 tax credit available to first-time homebuyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment and can be claimed on a tax return to reduce the purchaser’s income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a
check to the purchaser. Over 300,000 first-time homebuyers are expected to take advantage of this program.

1. The amount of the credit is $8,000 and it is not a loan.
Unlike the old 2008 program, this is a true credit via “tax refund” of $8,000 (or 10% of home purchase price, if less). To get this
money, you file your tax return FY2009 or amend your 2008 return and get your refund this year. Recapture or repayment will only be required if you sold your home within 36 months of purchase.

2. Who are eligible first-time buyers?
Any person who has not owned a principal residence in the past three years qualifies as a first-time homebuyer. Also, someone who owns rental property or a vacation home that is not their principal residence could still be a first-time homebuyer.

3. The income limit is $75k for singles and $150k for couples.
A taxpayer must determine their modified adjusted gross income or MAGI. To find it, they find their “adjusted gross income” or AGI for the year. On Forms 1040 and 1040A, AGI is the last number on page one and first number on page two of the form. Note that AGI includes all forms of income including wages, salaries, interest income, dividends, and capital gains. To determine modified adjusted gross income (MAGI), add to AGI any foreign income, foreignhousing deductions, student-loan deductions, IRA-contribution deductions, and deductions for higher-education costs. Singles’ MAGI limit is no more than $75,000 and married couples cannot make more than $150,000 for the full credit. Partial credit is available for those with MAGI
between $75k to $95k ($150k-$170k for joint filers).

4. What housing qualifies as a ‘principal residence’?
Single family homes, condos, townhouses, and co-ops qualify so long as they are used as the taxpayer’s principal residence and purchased on or after January 1, 2009 and before December 1, 2009. Homes purchased last year do not qualify for this program. Also, sales between immediate family members are ineligible.
Let me know if you have any other questions!

Investing in Multi-Family Real Estate makes greater financial sense

Given the current real estate climate you’d be bang on the button if you started to ask the smart questions. The smart questions of course have to do with choice, like should you be choosing to invest your money in single-family homes or should you go into multiple-family properties.

When it comes to making money I am always open-minded and it is always good to examine trends and weight things up in a matter-of-fact way because then the judgment made is more objective. Objectivity is highly prized particularly when you are looking for a way out of the rat-race, so let’s go to it.

Over the past few years anyone who bought a single-family house has seen a handsome return for their money. This is because prices have been increasing at a double-digit rate leading to some serious appreciation and equity build-up. As of December last year things changed.

We are now in what is going to be, by all forecasts, a prolonged period of either static or dropping property appreciation and this means that putting your money in a single-Family property is not going to be the smartest investment decision of your life.

Which leads me, naturally, into the appeal of multi-Family properties. In the eyes of most real estate investors the perceived drawback of a multi-Family property is the fact that you will have to deal with tenants (and the issues of the blocked toilet drain in the middle of the night) and have far more complicated book keeping to do than with a single-Family property.

Your fears here are unfounded. After all let’s be clear about one thing: you are going into this business exactly because you want to be free from the rat race routine and desk slave mentality not because you want to replace one with another.

If you are ready to truly shed your desk-slave chains and stop working nine-to-five for peanuts then you will have to start thinking about getting into the multi-family real estate investment market and become owner of properties which generate cash for you month after month irrespective of whether you are in town doing some work or have hit the slopes at Aspen for some serious skiing and much needed R & R time.

Have Fun!!!

Home Prices Edged up in January

Home prices rose 1.7 percent in January, up for the first time in 10 months, according to the Federal Housing Finance Agency, which only reports prices for conforming properties with mortgages backed by Fannie Mae and Freddie Mac.

Many analysts were skeptical about the results because the report excludes expensive homes with subprime loans and jumbo mortgages.

The government did note that sales numbers in January were low and that could skew the results.

Meanwhile, the Commerce Department is expected to report today that new home sales fell in February to a seasonally adjusted annual rate of 300,000 units from 309,000 units in January. This is the lowest level since 1963.

Mass. Unmployment by city/town

Came across this link today –

http://boston.bizjournals.com/boston/stories/2009/03/09/daily19.html?ana=e_du_pap

The Dreaded Weigh-In

Stepped on the scale last night and to my surprise weighed in at 249.10lbs

Thats 22.9 pounds lost since the start of the year.

I now run 2.5 miles 3-4 times a week. I always new that for me running was the only way to lose the weight, so I finally sucked it up, no matter how bored I get and just run. What has helped is a killer “workout – pump you up” music on my ipod. It really makes the difference. So i’m 1/3 of the way to my goal….

Existing-Home Sales Fell in January!

Existing-home sales declined in January with some buyers waiting to see how details of the economic stimulus package would affect them, according to the NATIONAL ASSOCIATION OF REALTORS®. At the same time, inventories fell to a two-year low.

Existing-home sales, including single-family, townhomes, condominiums, and co-ops, fell 5.3 percent to a seasonally adjusted annual rate of 4.49 million units in January from a level of 4.74 million units in December, and are 8.6 percent lower than the 4.91 million-unit pace in January 2008.

Lawrence Yun, NAR chief economist, said there was understandable hesitation by some home buyers. “Given so much stimulus package discussion in January, some would-be buyers simply sat out for clarity and certainty on the nature of housing stimulus,” he said. “The housing market will soon get a lift from very favorable buying conditions—not only from improved affordability, but also from the stimulus of an $8,000 first-time home buyer tax credit, and higher conforming loan limits that will allow more people to tap into 50-year low mortgage rates.”

NAR estimates the impact of the stimulus package and lower interest rates on the housing market to be about 900,000 additional home sales in 2009 compared to conditions before the stimulus package. Inventory is expected to fall below an 8-month supply by year’s end, which would be consistent with home price stabilization.

Inventory dropped 2.7 percent

Total housing inventory at the end of January fell 2.7 percent to 3.60 million existing homes available for sale, which represents a 9.6-month supply at the current sales pace. Because sales were down, the January supply is up from a 9.4-month supply in December.

“The drop in total inventory is an encouraging sign because the number of homes on the market has declined steadily since peaking in July 2008, and inventory is at the lowest level in two years,” Yun said. In January 2007 there were 3.54 million homes for sale.

A buyer can get a really good deal on a distressed sale, although that home may require some significant effort to bring it up to standard. A preliminary analysis by NAR suggests that non-distressed properties are holding their value much better.

It will take a while for the stimulus to show in housing data. From the time a buyer starts looking for a home until it is reported as a closed sale can take as long as five months: a median of 10 weeks to search and make an offer, about 6 weeks to close the transaction and up to 4 weeks to collect and report the data. This means improvement from the economic stimulus isn’t likely to show as closed home sales before summer, although we may see an earlier lift from lower mortgage interest rates.

Northeast: Regionally, existing-home sales in the Northeast dropped 14.7 percent to an annual pace of 640,000 in January, and are 23.8 percent lower than January 2008. The median price in the Northeast was $228,200, down 14.7 percent from a year ago.

Fannie and Freddie Plan Big Fee Increases

Fannie Mae and Freddie Mac are both toughening their credit score and down-payment rules as of April 1.

In response, major lenders are already factoring in the higher fees, which reduces the effectiveness of the stimulus efforts.

Under the new guidelines, buyers with down payments of less than 25 percent 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 percent add-on.

Refinancers who take cash out will be charged as much as three points if they have a low to moderate equity stake.

Freddie spokesman Brad German says the loan categories and credit risk combinations targeted by these fees “default at four to eight times” the rate of other mortgages backed by Freddie. “We have to manage these risks appropriately,” he says.