SO MUCH FOR THE TAX CREDIT AS A DOWN PAYMENT

Looks like they flip flopped on this deal. This would have really brought in more buyers at the lower price ranges. We have 3 buyers right now in the saving mode, that would have bought today if they could have used the tax credit for their downpayment. This would have increased demand and helped sell those foreclosures and bank owned properties.

Tax credit ineligible for down payment
Feds reverse rule to assist first-time home buyers
by J. Craig Anderson - May. 19, 2009 12:00 AM
The Arizona Republic
Federal officials on Monday reversed an earlier decision to allow first-time home buyers to use an $8,000 tax credit to borrow the down payment on a home.
A week earlier, U.S. Department of Housing and Urban Development Secretary Shaun Donovan had told the National Association of Home Builders that HUD would let banks and local governments offer short-term "bridge loans" to cover the down payment for first-time buyers eligible for the tax credit. The loans would have been available to applicants for federally insured mortgages such as Federal Housing Administration loans.
Lenders, home builders and real- estate agents had reacted favorably to the bridge-loan proposal, saying it would open up the housing market to more first-time buyers.

MORE GOOD NEWS FOR FIRST TIME HOME BUYERS, USE TAX CREDIT AS DOWNPAYMENT

Yes, that is NAR working to find answers to the mortgage meltdown. HUD is working on a program with preferred lenders to use the First Time Home Buyer Tax Credit of $8,000 as a down payment.
This would add to demand. This whole issue right now is about supply and demand. Oh and don't listen to those naysayers that blamed this whole mess on 100% financing. This problem was not caused by 100% financing or stated income. It was caused because lenders fraudulently putting people in loans not designed for them. What I mean is the stated income loans were designed for people that were paid through 1099. Those people are unjustly qualified by lenders and thus many times need stated income. A 1099 self employed individual may have $2,000 a month is payments as part of their expenses. Lenders require them to count that expense twice, once in their P & L and again when qualifying for the loan. Thus, stated income was needed. However, in the heyday, when a buyer did not qualify through conventional means the lender just switched them to stated income. Even though the buyer was a W-2 employee. Most buyers had no idea this was happening, nor that it was fraudulent.
OMG, I went off on a tangent again. Read the article below from NAR about HUD allowing buyers to use their tax credit towards their downpayment.
Just my opinion...Jeff Cameron

WASHINGTON, May 12, 2009

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said that the
Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a downpayment.

Donovan’s remarks came in an address to several thousand Realtors^® gathered this morning at The Real Estate Summit: Advancing the U.S. Economy, a special daylong session at the Realtors^® Midyear Legislative Meetings & Trade Expo here.

Secretary Donovan said that important changes, which the National Association of Realtors^® has been calling for, will help consumers purchase a home. “We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a downpayment,” Donovan said. According to Donovan, the FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

Donovan said the Obama administration plans to further stabilize the housing market. “I do think we have some early signs hat the market overall is stabilizing,” said Donovan. “Since January we’ve seen both home sales moving up and down around a relatively stable number and we are seeing the first signs that the rapid decline in home prices is starting to abate.”

http://www.realtor.org/press_room/news_releases/2009/05/re_summit?lid=ronav0019

FINALLY, SOME REPORTS ON HIGHER SALES OF HOME

It is so nice to finally see some real reports on how much the home sales have jumped recently. This report shows home sales in Arizona are up 50.2%. Prices are down, but sales are up. We need demand to take over before we see price increases. They are coming soon, well coming now in some areas. Below is taken from the article quoted after this quick quote, there is a link to the whole article at the end.
Just my opinion...Jeff Cameron
The largest sales gains were seen in some of the hardest hit areas. Nevada was up 116.8 percent from a year ago. California was up 80.6 percent. Arizona was up 50.2 percent and Florida was up 25 percent.

First time homebuyers taking advantage of foreclosures and short sales

Lita Epstein
May 12th 2009 at 10:00AM

About half of all home purchases in the first quarter of 2009 were first-time home buyers taking advantage of the deeply discounted foreclosures and short sales, as well as their $8,000 tax credit, according to the National Association of Realtors (NAR). NAR released its Metropolitan Median Prices survey for the first quarter today.
read the rest of the story: http://www.dailyfinance.com/2009/05/12/first-time-homebuyers-taking-advantage-of-foreclosures-and-short/

NEW FIRST TIME HOME BUYER TAX CREDIT

I have had many calls and questions about the first time home buyer credit. This information was supplied by Jan Havill of Bank of America. Jan can be reached at 480.624.0392 Or janet.l.havill@bankofamerica.com

First‐time Homebuyer Tax Credit
Housing and Economic Recovery Act of 2008

First Time Home Buyer Credit
Amount of Credit
Ten percent of cost of home, not to exceed $8000
Eligible Property
Any single‐family residence (including condos, co‐ops) that will be used as a principal residence.
Benefits
For homes purchased in 2009, you must repay the credit only if the home ceases to be your main home within a 36-month period beginning on the purchase date.
Income Limit
Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000, respectively).
First‐time Homebuyer Only
Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase.
Recapture
You must repay the credit ONLY if the home ceases to be your main home within the 36-month period beginning on the purchase date.
Effective Date
Purchases in the United States after January 1, 2009
Termination
December 1, 2009
Who Cannot Claim the Credit
Refer to IRS Form 5405 (revised 2-09) for exclusions.

“2009 is the Year of Recovery…..One Home at a Time!”
14648 N. SCOTTSDALE RD. SUITE 250 SCOTTSDALE, AZ 85254 480-624-0392
janet.l.havill@bankofamerica.com