Should you Rent or Buy?
Although some renters believe that renting is “maintenance free,” they are actually paying for maintenance in their rent – whether they need it or not. Renting offers you no equity, no tax benefit, and no protection against regular rent increases. If you’re paying rent, you’re really just paying someone else’s mortgage. Let’s compare.*
In the table below you can see how in some cases, when you factor in tax deductions you can own for less than the cost of rent! To find out if renting or owning is the right choice for you, give me a call and I'll be happy to assist you.
Rent vs. Own
Monthly Payment $1,000 Monthly Payment $855
Insurance $30 Insurance $50
Taxes $0 Taxes $260
MIP Insurance $45
Total Payment $1,030 Total Payment $1,210
Savings
Interest Deduction $0 Interest Deduction $175
Tax Deduction $0 Tax Deduction $75
After Tax
Net Monthly Payment $1,030 Net Monthly Payment $960
* Approximate Payment/Cost Comparison based on estimated annual tax results. Based on 2.5 tax bracket and on estimated first year interest and taxes. Recommend consulting with tax expert. Payment based on FHA 30-year fixed rate loan with 7% interest rate, sales price of $125,000 and a loan balance of $121,250. Interest rate/rental rates, prices, terms, and availability subject to change without notice. See a qualified tax consultant for more details.
Right now is the best time to buy with interest rates being very low, with a possibility of sinking to levels not seen since the 1960's! If you or anybody you know are currently stuck in the rent trap and want to get out, give me a call or send me an e-mail and together we'll see if buying is the best option for you.
Wednesday, April 8, 2009
The Perfect Storm-Home Prices/Interest Rates
Home Prices – Interest Rates – The Perfect Storm
I ran some numbers today just to show what “Fence Sitters” may be costing themselves by taking no action when the conditions are ideal for most anyone who is in the market and qualifies to buy a home.
The “Fence Sitters” are the ones who will sit and watch and wait, and wait, and wait… they wait for ideal conditions to appear. They are the ones who just know, they can feel it in their bones they know that rates are going to get better, even though they are at close to 40 year lows – right now! They also know that home prices are going to come down and still go lower maybe another 5% or even 10% lower than they are right now, even though home prices in Utah are close to what they were back in 2003! Are you a fence sitter? Don’t miss it, Don’t blink!
First time home buyers or those that haven’t owned in the past three years more than likely will qualify for the governments’ $7500.00 tax credit. Provided they don’t use a grant program. I qualify folks on what they can afford as a Monthly Payment which translates into a Home Price Range. I want to illustrate what waiting will actually cost in real dollars.
Loan Amount Rate Payment Payment Rate Home
$320,000.00 @ 5.25% = $1,766.00 $1,766.00 @ 5.25% = $320,000.00
$320,000.00 @ 6.00% = $1,918.00 $1,766.00 @ 6.00% = $294,700.00
$320,000.00 @ 6.50% = $2,022.00 $1,766.00 @ 6.50% = $279,540.00
$320,000.00 @ 7.00% = $2,128.00 $1,766.00 @ 7.00% = $265,566.00
$320,000.00 @ 7.50% = $2,237.00 $1,766.00 @ 7.50% = $252,680.00
$320,000.00 @ 8.00% = $2,348.00 $1,766.00 @ 8.00% = $240,775.00
Payment will go up substantially for the exact same home!
You simply can’t buy as much home for the very same payment!
FACT: Rates are Phenomenal - now!
FACT: Home Prices are Lower and Fantastic!
FACT: We are in the PERFECT STORM! Remember the movie?
Home prices and interest rates are subject to change and both most likely will go up.
Who do you know who is currently renting but who should buy a home? CALL ME
Who do you know who wants to invest in real estate? CALL ME
Who do you know who want to move up or move down? CALL ME
And don't wait......CALL ME today!
I ran some numbers today just to show what “Fence Sitters” may be costing themselves by taking no action when the conditions are ideal for most anyone who is in the market and qualifies to buy a home.
The “Fence Sitters” are the ones who will sit and watch and wait, and wait, and wait… they wait for ideal conditions to appear. They are the ones who just know, they can feel it in their bones they know that rates are going to get better, even though they are at close to 40 year lows – right now! They also know that home prices are going to come down and still go lower maybe another 5% or even 10% lower than they are right now, even though home prices in Utah are close to what they were back in 2003! Are you a fence sitter? Don’t miss it, Don’t blink!
First time home buyers or those that haven’t owned in the past three years more than likely will qualify for the governments’ $7500.00 tax credit. Provided they don’t use a grant program. I qualify folks on what they can afford as a Monthly Payment which translates into a Home Price Range. I want to illustrate what waiting will actually cost in real dollars.
Loan Amount Rate Payment Payment Rate Home
$320,000.00 @ 5.25% = $1,766.00 $1,766.00 @ 5.25% = $320,000.00
$320,000.00 @ 6.00% = $1,918.00 $1,766.00 @ 6.00% = $294,700.00
$320,000.00 @ 6.50% = $2,022.00 $1,766.00 @ 6.50% = $279,540.00
$320,000.00 @ 7.00% = $2,128.00 $1,766.00 @ 7.00% = $265,566.00
$320,000.00 @ 7.50% = $2,237.00 $1,766.00 @ 7.50% = $252,680.00
$320,000.00 @ 8.00% = $2,348.00 $1,766.00 @ 8.00% = $240,775.00
Payment will go up substantially for the exact same home!
You simply can’t buy as much home for the very same payment!
FACT: Rates are Phenomenal - now!
FACT: Home Prices are Lower and Fantastic!
FACT: We are in the PERFECT STORM! Remember the movie?
Home prices and interest rates are subject to change and both most likely will go up.
Who do you know who is currently renting but who should buy a home? CALL ME
Who do you know who wants to invest in real estate? CALL ME
Who do you know who want to move up or move down? CALL ME
And don't wait......CALL ME today!
My Life as a Realtor.
Things have been really busy! I have been going full tilt lately. Here are some great facts that i have for you. It has been a while.
Don't keep me a secret. Let me know if you have someone that needs to buy, Sell or get rich in Real Estate!
Fasten your seatbelt; we are half way through the ride.
Four years ago the media said I was a pessimist and my predictions for a major housing downturn were ignored or laughed at. Now over the past two month many have considered me an "optimist" since I have been indicating that many regions have hit a real estate bottom and others are only months away from recovery. Of course this does not mean double digit appreciation, but at a minimum recovery does indicate one to three percentage points in average appreciation. Beating inflation is all we need to see excellent returns on real estate investments. As indicated in my most recent book, the leverage (loan) behind a real estate investment creates incremental return on investment when we have appreciation at or close to inflation.
The key message that I would like to project to my readers is that all financial mechanisms follow cycles. The question everyone keeps asking is "How long will this down cycle last?". It is realistic to say that in the next 12 months our recession cycle will make way for a new business cycle. It is just common sense. The same was true during our last up business cycle (2003 to 2006) when we had double digit increases in real estate values. It came to an end, as I predicted. Cycles are inevitable but also predictable. Sure it is difficult to pinpoint the exact month, but it is not too difficult to pinpoint the year, especially during a downturn since these cycles typically last months and not years.
Are home prices closer to stabilization?
Today's National Association of Realtors data showed that "Existing Home Sales" jumped by 5.1% in the month of February. Meanwhile the median sales price fell 15.5 percent to $165,400.
Median selling prices are now equal to 2.9 times median household incomes. Just two years ago they were at a ratio of 4.5 times income. We are now at levels not seen since the housing boom in the 1980's. For those of you who experienced our 1982-1983 recession, you know that it was our worst recession on record since the Great Depression. Immediately after the recession home prices started to rebound and a real estate boom occurred from 1984 to 1989.
Our current recession is not the same as 1982, and therefore this recession will not rebound with a real estate boom. Demand will take some time to catch up with supply (currently we have 9.7 months of supply on the "for sale" marketing). However it is extremely likely to follow past business cycles of stabilization over the next two quarters, followed by increased demand and light appreciation over the next few years.
Most of us like to look back and not forward. If you are a forward thinker, as most entrepreneurs are, then you will want to consider real estate as an essential part of your investment strategy, especially now when the market is at or near bottom.
Ed Ross
Should you Rent or Buy?
Although some renters believe that renting is “maintenance free,” they are actually paying for maintenance in their rent – whether they need it or not. Renting offers you no equity, no tax benefit, and no protection against regular rent increases. If you’re paying rent, you’re really just paying someone else’s mortgage. Let’s compare.*
In the table below you can see how in some cases, when you factor in tax deductions you can own for less than the cost of rent! To find out if renting or owning is the right choice for you, give me a call and I'll be happy to assist you.
Rent vs. Own
Monthly Payment $1,000 Monthly Payment $855
Insurance $30 Insurance $50
Taxes $0 Taxes $260
MIP Insurance $45
Total Payment $1,030 Total Payment $1,210
Savings
Interest Deduction $0 Interest Deduction $175
Tax Deduction $0 Tax Deduction $75
After Tax
Net Monthly Payment $1,030 Net Monthly Payment $960
* Approximate Payment/Cost Comparison based on estimated annual tax results. Based on 2.5 tax bracket and on estimated first year interest and taxes. Recommend consulting with tax expert. Payment based on FHA 30-year fixed rate loan with 7% interest rate, sales price of $125,000 and a loan balance of $121,250. Interest rate/rental rates, prices, terms, and availability subject to change without notice. See a qualified tax consultant for more details.
Right now is the best time to buy with interest rates being very low, with a possibility of sinking to levels not seen since the 1960's! If you or anybody you know are currently stuck in the rent trap and want to get out, give me a call or send me an e-mail and together we'll see if buying is the best option for you
I ran some numbers today just to show what “Fence Sitters” may be costing themselves by taking no action when the conditions are ideal for most anyone who is in the market and qualifies to buy a home.
The “Fence Sitters” are the ones who will sit and watch and wait, and wait, and wait… they wait for ideal conditions to appear. They are the ones who just know, they can feel it in their bones they know that rates are going to get better, even though they are at close to 40 year lows – right now! They also know that home prices are going to come down and still go lower maybe another 5% or even 10% lower than they are right now, even though home prices in Utah are close to what they were back in 2003! Are you a fence sitter? Don’t miss it, Don’t blink!
First time home buyers or those that haven’t owned in the past three years more than likely will qualify for the governments’ $7500.00 tax credit. Provided they don’t use a grant program. I qualify folks on what they can afford as a Monthly Payment which translates into a Home Price Range. I want to illustrate what waiting will actually cost in real dollars.
Loan Amount Rate Payment Payment Rate Home
$320,000.00 @ 5.25% = $1,766.00 $1,766.00 @ 5.25% = $320,000.00
$320,000.00 @ 6.00% = $1,918.00 $1,766.00 @ 6.00% = $294,700.00
$320,000.00 @ 6.50% = $2,022.00 $1,766.00 @ 6.50% = $279,540.00
$320,000.00 @ 7.00% = $2,128.00 $1,766.00 @ 7.00% = $265,566.00
$320,000.00 @ 7.50% = $2,237.00 $1,766.00 @ 7.50% = $252,680.00
$320,000.00 @ 8.00% = $2,348.00 $1,766.00 @ 8.00% = $240,775.00
Payment will go up substantially for the exact same home!
You simply can’t buy as much home for the very same payment!
FACT: Rates are Phenomenal - now!
FACT: Home Prices are Lower and Fantastic!
FACT: We are in the PERFECT STORM! Remember the movie?
Home prices and interest rates are subject to change and both most likely will go up.
I truly believe that once Obama is sworn in as President on January 20th - interest rates are going to go up. I believe they will be around 8% sometime in 2009 - they have to go up to help fix the economic disaster our country is currently facing!
Who do you know who is currently renting but who should buy a home? CALL ME
Who do you know who wants to invest in real estate? CALL ME
Who do you know who want to move up or move down? CALL ME
And don't wait......CALL ME today!
If you have any questions about what you have seen here, Don't hesitate to call me now!
Don't keep me a secret. Let me know if you have someone that needs to buy, Sell or get rich in Real Estate!
Fasten your seatbelt; we are half way through the ride.
Four years ago the media said I was a pessimist and my predictions for a major housing downturn were ignored or laughed at. Now over the past two month many have considered me an "optimist" since I have been indicating that many regions have hit a real estate bottom and others are only months away from recovery. Of course this does not mean double digit appreciation, but at a minimum recovery does indicate one to three percentage points in average appreciation. Beating inflation is all we need to see excellent returns on real estate investments. As indicated in my most recent book, the leverage (loan) behind a real estate investment creates incremental return on investment when we have appreciation at or close to inflation.
The key message that I would like to project to my readers is that all financial mechanisms follow cycles. The question everyone keeps asking is "How long will this down cycle last?". It is realistic to say that in the next 12 months our recession cycle will make way for a new business cycle. It is just common sense. The same was true during our last up business cycle (2003 to 2006) when we had double digit increases in real estate values. It came to an end, as I predicted. Cycles are inevitable but also predictable. Sure it is difficult to pinpoint the exact month, but it is not too difficult to pinpoint the year, especially during a downturn since these cycles typically last months and not years.
Are home prices closer to stabilization?
Today's National Association of Realtors data showed that "Existing Home Sales" jumped by 5.1% in the month of February. Meanwhile the median sales price fell 15.5 percent to $165,400.
Median selling prices are now equal to 2.9 times median household incomes. Just two years ago they were at a ratio of 4.5 times income. We are now at levels not seen since the housing boom in the 1980's. For those of you who experienced our 1982-1983 recession, you know that it was our worst recession on record since the Great Depression. Immediately after the recession home prices started to rebound and a real estate boom occurred from 1984 to 1989.
Our current recession is not the same as 1982, and therefore this recession will not rebound with a real estate boom. Demand will take some time to catch up with supply (currently we have 9.7 months of supply on the "for sale" marketing). However it is extremely likely to follow past business cycles of stabilization over the next two quarters, followed by increased demand and light appreciation over the next few years.
Most of us like to look back and not forward. If you are a forward thinker, as most entrepreneurs are, then you will want to consider real estate as an essential part of your investment strategy, especially now when the market is at or near bottom.
Ed Ross
Should you Rent or Buy?
Although some renters believe that renting is “maintenance free,” they are actually paying for maintenance in their rent – whether they need it or not. Renting offers you no equity, no tax benefit, and no protection against regular rent increases. If you’re paying rent, you’re really just paying someone else’s mortgage. Let’s compare.*
In the table below you can see how in some cases, when you factor in tax deductions you can own for less than the cost of rent! To find out if renting or owning is the right choice for you, give me a call and I'll be happy to assist you.
Rent vs. Own
Monthly Payment $1,000 Monthly Payment $855
Insurance $30 Insurance $50
Taxes $0 Taxes $260
MIP Insurance $45
Total Payment $1,030 Total Payment $1,210
Savings
Interest Deduction $0 Interest Deduction $175
Tax Deduction $0 Tax Deduction $75
After Tax
Net Monthly Payment $1,030 Net Monthly Payment $960
* Approximate Payment/Cost Comparison based on estimated annual tax results. Based on 2.5 tax bracket and on estimated first year interest and taxes. Recommend consulting with tax expert. Payment based on FHA 30-year fixed rate loan with 7% interest rate, sales price of $125,000 and a loan balance of $121,250. Interest rate/rental rates, prices, terms, and availability subject to change without notice. See a qualified tax consultant for more details.
Right now is the best time to buy with interest rates being very low, with a possibility of sinking to levels not seen since the 1960's! If you or anybody you know are currently stuck in the rent trap and want to get out, give me a call or send me an e-mail and together we'll see if buying is the best option for you
Home Prices – Interest Rates – The Perfect Storm
I ran some numbers today just to show what “Fence Sitters” may be costing themselves by taking no action when the conditions are ideal for most anyone who is in the market and qualifies to buy a home.
The “Fence Sitters” are the ones who will sit and watch and wait, and wait, and wait… they wait for ideal conditions to appear. They are the ones who just know, they can feel it in their bones they know that rates are going to get better, even though they are at close to 40 year lows – right now! They also know that home prices are going to come down and still go lower maybe another 5% or even 10% lower than they are right now, even though home prices in Utah are close to what they were back in 2003! Are you a fence sitter? Don’t miss it, Don’t blink!
First time home buyers or those that haven’t owned in the past three years more than likely will qualify for the governments’ $7500.00 tax credit. Provided they don’t use a grant program. I qualify folks on what they can afford as a Monthly Payment which translates into a Home Price Range. I want to illustrate what waiting will actually cost in real dollars.
Loan Amount Rate Payment Payment Rate Home
$320,000.00 @ 5.25% = $1,766.00 $1,766.00 @ 5.25% = $320,000.00
$320,000.00 @ 6.00% = $1,918.00 $1,766.00 @ 6.00% = $294,700.00
$320,000.00 @ 6.50% = $2,022.00 $1,766.00 @ 6.50% = $279,540.00
$320,000.00 @ 7.00% = $2,128.00 $1,766.00 @ 7.00% = $265,566.00
$320,000.00 @ 7.50% = $2,237.00 $1,766.00 @ 7.50% = $252,680.00
$320,000.00 @ 8.00% = $2,348.00 $1,766.00 @ 8.00% = $240,775.00
Payment will go up substantially for the exact same home!
You simply can’t buy as much home for the very same payment!
FACT: Rates are Phenomenal - now!
FACT: Home Prices are Lower and Fantastic!
FACT: We are in the PERFECT STORM! Remember the movie?
Home prices and interest rates are subject to change and both most likely will go up.
I truly believe that once Obama is sworn in as President on January 20th - interest rates are going to go up. I believe they will be around 8% sometime in 2009 - they have to go up to help fix the economic disaster our country is currently facing!
Who do you know who is currently renting but who should buy a home? CALL ME
Who do you know who wants to invest in real estate? CALL ME
Who do you know who want to move up or move down? CALL ME
And don't wait......CALL ME today!
If you have any questions about what you have seen here, Don't hesitate to call me now!
Quotes-Brian E. Betts
I recieve Daily quotes. Please enjoy.
"The greatest good you can do for another is not just to share your
riches, but to reveal to him his own."
-- Benjamin Disraeli
"To make no mistakes is not in the power of man; but from their errors
and mistakes, the wise and the good learn wisdom for the future."
-- Plutarch, Historian
"A champion is one who gets up even when he can't."
-- Jack Dempsey, Heavyweight Boxing Champion
"Trying times are not the times to stop trying."
-- Ray Owen, Writer
"I don't wait for moods. You accomplish nothing if you do that. Your
mind must know it has got to get down to work."
-- Pearl Buck, Novelist
"I sometimes think that the saving grace of America lies in the fact
that the overwhelming majority of Americans are possessed of two great
qualities -- a sense of humor and a sense of proportion. "
-- Franklin Roosevelt, 32nd U.S. president
"You've got to get to the state in life where going for it is more
important than winning or losing"
-- Arthur Ashe, Tennis Player
"A good objective of leadership is to help those who are doing poorly to
do well and to help those who are doing well do even better"
-- Jim Rohn, Motivational Speaker
"Heroism consists of hanging on one minute longer."
-- Norwegian Proverb
"Knowledge is power, but enthusiasm pulls the switch"
-- Ivern Ball, Poet
"Good ideas are not adopted automatically. They must be driven into
practice with courageous patience."
-- Hyman Rickover, Admiral
"So great has been the endurance, so incredible the achievement that, as
long as the sun keeps a set course in heaven, it would be foolish to
despair of the human race."
-- Ernest Woodward, Publisher
"Don't tell people how to do things, tell them what to do and let them
surprise you with their results. "
-- George S. Patton, US Army General
"Effective leadership is not about making speeches or being liked;
leadership is defined by results not attributes."
-- Peter F. Drucker, Author and Management Expert
"Perseverance is not a long race; it is many short races one after
another."
-- Walter Elliott
"Everyone starts from scratch, but not everyone keeps on scratching!"
-- Anonymous
"Nothing is more expensive than a missed opportunity."
-- H. Jackson Brown, Author
"Miracles sometimes occur, but one has to work terribly hard for them"
-- Chaim Weizmann, Chemist
"The first part of success is "Get-to-it-iveness"; the second part of
success is "Stick-to-it-iveness.""
-- Orison Swett Marden, Editor, Success Magazine
If you would like to receive daily Quotes and other great info, cut and paste this into your browser. http://www.briantracy.com/newsletter/default.aspx?ssid=682480cd-9d91-4a09-85fa-9a01d7eeb8c5
"The greatest good you can do for another is not just to share your
riches, but to reveal to him his own."
-- Benjamin Disraeli
"To make no mistakes is not in the power of man; but from their errors
and mistakes, the wise and the good learn wisdom for the future."
-- Plutarch, Historian
"A champion is one who gets up even when he can't."
-- Jack Dempsey, Heavyweight Boxing Champion
"Trying times are not the times to stop trying."
-- Ray Owen, Writer
"I don't wait for moods. You accomplish nothing if you do that. Your
mind must know it has got to get down to work."
-- Pearl Buck, Novelist
"I sometimes think that the saving grace of America lies in the fact
that the overwhelming majority of Americans are possessed of two great
qualities -- a sense of humor and a sense of proportion. "
-- Franklin Roosevelt, 32nd U.S. president
"You've got to get to the state in life where going for it is more
important than winning or losing"
-- Arthur Ashe, Tennis Player
"A good objective of leadership is to help those who are doing poorly to
do well and to help those who are doing well do even better"
-- Jim Rohn, Motivational Speaker
"Heroism consists of hanging on one minute longer."
-- Norwegian Proverb
"Knowledge is power, but enthusiasm pulls the switch"
-- Ivern Ball, Poet
"Good ideas are not adopted automatically. They must be driven into
practice with courageous patience."
-- Hyman Rickover, Admiral
"So great has been the endurance, so incredible the achievement that, as
long as the sun keeps a set course in heaven, it would be foolish to
despair of the human race."
-- Ernest Woodward, Publisher
"Don't tell people how to do things, tell them what to do and let them
surprise you with their results. "
-- George S. Patton, US Army General
"Effective leadership is not about making speeches or being liked;
leadership is defined by results not attributes."
-- Peter F. Drucker, Author and Management Expert
"Perseverance is not a long race; it is many short races one after
another."
-- Walter Elliott
"Everyone starts from scratch, but not everyone keeps on scratching!"
-- Anonymous
"Nothing is more expensive than a missed opportunity."
-- H. Jackson Brown, Author
"Miracles sometimes occur, but one has to work terribly hard for them"
-- Chaim Weizmann, Chemist
"The first part of success is "Get-to-it-iveness"; the second part of
success is "Stick-to-it-iveness.""
-- Orison Swett Marden, Editor, Success Magazine
If you would like to receive daily Quotes and other great info, cut and paste this into your browser. http://www.briantracy.com/newsletter/default.aspx?ssid=682480cd-9d91-4a09-85fa-9a01d7eeb8c5
$6000 Tax Credit for New Contruction
The Home Run Plan for New construction for Utah. This is good stuff and here are some facts!
The $6,000 Home Buyers Program AKA Home Run Program is now here and ready to use.
This will go though Utah Housing Corporation and when the money is gone it’s gone! There are only about 1,667 of these so if you have people who want it they need to move fast.
We have documented clarification on “piggy backing of programs” so this is the time to sell as many homes as you can. The questions have been;
Q. Beckie, if I find a home and or buyers who can do a Utah Housing loan and or a Rural Housing loan can they use the $8,000 Tax Credit?
A. YES they can. This has gone back and forth; all they need to do is see their Tax person and the form they use is 5405 (See attachment).
Q. Can you use the Home Run Program for the down payment and then use the $8,000 Tax Credit too?
A. Yes, just remember the Home Run Program can be use for anyone buying a new build and fits all the guide lines, income etc… If the buyer is not a 1st time home buyer then they can’t use the $8,000.
Q. How long will this last?
A. Money does have an end- The Home Run Program will end when all the allotments have been used, again about 1,667 of them. The $8,000 is till Dec 1 2009.
I hope this helps any questions or clients you need help with please let me know,
The $6,000 Home Buyers Program AKA Home Run Program is now here and ready to use.
This will go though Utah Housing Corporation and when the money is gone it’s gone! There are only about 1,667 of these so if you have people who want it they need to move fast.
We have documented clarification on “piggy backing of programs” so this is the time to sell as many homes as you can. The questions have been;
Q. Beckie, if I find a home and or buyers who can do a Utah Housing loan and or a Rural Housing loan can they use the $8,000 Tax Credit?
A. YES they can. This has gone back and forth; all they need to do is see their Tax person and the form they use is 5405 (See attachment).
Q. Can you use the Home Run Program for the down payment and then use the $8,000 Tax Credit too?
A. Yes, just remember the Home Run Program can be use for anyone buying a new build and fits all the guide lines, income etc… If the buyer is not a 1st time home buyer then they can’t use the $8,000.
Q. How long will this last?
A. Money does have an end- The Home Run Program will end when all the allotments have been used, again about 1,667 of them. The $8,000 is till Dec 1 2009.
I hope this helps any questions or clients you need help with please let me know,
$8000 Tax Credit
This is one I can stand behind! This is real money and it does not have to be paid back! Here are some facts on it and some other housing stuff!
H.R. 1, the “American Recovery and Reinvestment Act of 2009,” passed the House on February 13, 2009, by a vote of 246 - 184. The Senate also passed the bill later that day. The President is expected to sign the bill soon. The bill is a $780 billion package, with roughly 35% of the package devoted to tax cuts (mostly for 2009) and the rest to spending intended to occur in 2009 and 2010.
The mix of provisions of interest to REALTORS® changed frequently throughout the legislative process, with changes continuing to be made just hours before the measure was released prior to the vote. In the end, the elements of NAR’s housing agenda were included. Congress and the President have announced that a finance and housing package (including tax provisions) will be the next “big” initiative, so Congress has by no means finished its work as it affects the housing industry and REALTORS®.
The bill includes the following provisions:
Homebuyer Tax Credit
FHA, Fannie Mae and Freddie Mac Loan Limits
Neighborhood Stabilization
Commercial Real Estate
Rural Housing Service
Low Income-Housing Grants
Tax Exempt Housing Bonds
Energy Efficient Housing Tax Credits & Grants
Transportation Investments
Broadband Deployment
Homebuyer Tax Credit – The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will 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.
FHA, Fannie Mae and Freddie Mac Loan Limits -The bill reinstates last year's 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans. These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750. For the few areas where the 2009 limits were higher, the higher limits will apply. In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted, to increase the loan limit for any “sub-area”, i.e.an area smaller than a county. The Secretary's discretion is again limited by the $729,750 cap. These 2009 limits will expire December 31, 2009.
The inclusion of these loan limit provisions in the final bill is a victory for homeowners, buyers and Realtors. While these new limits were included in version of the original stimulus bill approved by the House, the bill first approved by the Senate did not. NAR's Call for Action to both the House and the Senate prior to the final vote advocated strongly for the provisions which were then included in the final bill approved by both Chambers.
Neighborhood Stabilization – Division A, Title XII of the bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP). The NSP was created by the Housing and Economic Recovery Act of 2089 (Public Law 110–289) to provide grants through the Community Development Block Grant program (CDBG) to states and localities to address the problems that can be created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties. After purchase the homes must be used to assist individuals and families with incomes at or below 120% of area median income. Twenty-five percent of funds must be used for households with incomes at or below 50% of area median income. By leveraging their expertise in partnership with others from both the public and private sector, Realtors® in many communities have been making important contributions to their local communities’ neighborhood stabilization programs.
Commercial Real Estate - Commercial real estate is impacted primarily through those provisions of the bill focused on green building and energy efficiency as well as business tax incentives. H.R. 1 provides significant funds for state energy programs, which could be used to support commercial property owners' investment in energy efficiency upgrades while commercial property owners seeking to invest in alternative energy systems for onsite power generation would benefit from the Department of Energy Renewable Energy Loan Guarantees Program. Of particular benefit to small businesses would be certain provisions of the bill that provide tax relief in the area of bonus depreciation and capital expenditures, as well as the 5-Year carry back of net operating losses for small businesses
Rural Housing Service Rural Housing Service – The bill provides an additional $500 million to existing USDA Rural Housing programs. The RHS provides both a guaranteed loan program and a direct housing loan program for those meeting the program’s eligibility criteria. The direct loan program will receive $270 million while $230 million will be allocated for unsubsidized guaranteed loans. It has been reported that this level of funding would provide for an additional 192,000 homeowners.
Low Income Housing Grants - Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.
Tax-Exempt Housing Bonds - Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT). In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds.
Energy Efficient Housing Tax Credits & Grants - To promote green jobs and energy independence, ARRA invests significantly in efforts to make homes and buildings more energy efficient. The bill provides state and local governments with $6 billion in energy efficiency and conservation grants for energy audits, retrofits and financial incentives. Through 2010, homeowners will be able to claim a 30% tax credit (up from 10%) for purchases of new furnaces, windows and insulation. Another $5 billion will be available to modernize the nation’s electricity grid and install smart meters on homes that help to save consumers money. There is also $5 billion for weatherization assistance for low income households and $2 billion for federally assisted housing (section 8) efficiency efforts.
Transportation Investments - The bill provides $46.7 billion to states and localities for capital investment for surface transportation projects including highways, bridges, transit, and rail projects. NAR policy supports increased spending on the types of transportation infrastructure addressed in the bill with the exception of Amtrak and high-speed inter-city rail where NAR has no policy. These investments will tend to moderate traffic congestion and support a variety of transportation alternatives which will improve the quality of life of American communities and bolster the value of real estate.
Broadband Deployment - The bill creates $7.2 billion in grants to promote broadband deployment in unserved and underserved areas and for mapping the availability of broadband service in the U.S. Any entity is eligible to apply for a grant including municipalities, public/private partnerships and private companies as long as they comply with the grant conditions. The grants are subject to “network neutrality” requirements to ensure that broadband networks be free of restrictions on content, sites, or platforms, on the kinds of equipment that may be attached, and on the modes of communication allowed.
The bill also charges the FCC is with developing a national broadband plan that shall seek to ensure that all Americans have access to broadband capability and shall establish benchmarks for meeting that goal.
These provisions are important victories for REALTORS because increased broadband access promotes economic growth and expands opportunities for home sales. A 2006 Commerce Department report determined that property values are 6% higher in communities where broadband is available
H.R. 1, the “American Recovery and Reinvestment Act of 2009,” passed the House on February 13, 2009, by a vote of 246 - 184. The Senate also passed the bill later that day. The President is expected to sign the bill soon. The bill is a $780 billion package, with roughly 35% of the package devoted to tax cuts (mostly for 2009) and the rest to spending intended to occur in 2009 and 2010.
The mix of provisions of interest to REALTORS® changed frequently throughout the legislative process, with changes continuing to be made just hours before the measure was released prior to the vote. In the end, the elements of NAR’s housing agenda were included. Congress and the President have announced that a finance and housing package (including tax provisions) will be the next “big” initiative, so Congress has by no means finished its work as it affects the housing industry and REALTORS®.
The bill includes the following provisions:
Homebuyer Tax Credit
FHA, Fannie Mae and Freddie Mac Loan Limits
Neighborhood Stabilization
Commercial Real Estate
Rural Housing Service
Low Income-Housing Grants
Tax Exempt Housing Bonds
Energy Efficient Housing Tax Credits & Grants
Transportation Investments
Broadband Deployment
Homebuyer Tax Credit – The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will 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.
FHA, Fannie Mae and Freddie Mac Loan Limits -The bill reinstates last year's 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans. These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750. For the few areas where the 2009 limits were higher, the higher limits will apply. In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted, to increase the loan limit for any “sub-area”, i.e.an area smaller than a county. The Secretary's discretion is again limited by the $729,750 cap. These 2009 limits will expire December 31, 2009.
The inclusion of these loan limit provisions in the final bill is a victory for homeowners, buyers and Realtors. While these new limits were included in version of the original stimulus bill approved by the House, the bill first approved by the Senate did not. NAR's Call for Action to both the House and the Senate prior to the final vote advocated strongly for the provisions which were then included in the final bill approved by both Chambers.
Neighborhood Stabilization – Division A, Title XII of the bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP). The NSP was created by the Housing and Economic Recovery Act of 2089 (Public Law 110–289) to provide grants through the Community Development Block Grant program (CDBG) to states and localities to address the problems that can be created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties. After purchase the homes must be used to assist individuals and families with incomes at or below 120% of area median income. Twenty-five percent of funds must be used for households with incomes at or below 50% of area median income. By leveraging their expertise in partnership with others from both the public and private sector, Realtors® in many communities have been making important contributions to their local communities’ neighborhood stabilization programs.
Commercial Real Estate - Commercial real estate is impacted primarily through those provisions of the bill focused on green building and energy efficiency as well as business tax incentives. H.R. 1 provides significant funds for state energy programs, which could be used to support commercial property owners' investment in energy efficiency upgrades while commercial property owners seeking to invest in alternative energy systems for onsite power generation would benefit from the Department of Energy Renewable Energy Loan Guarantees Program. Of particular benefit to small businesses would be certain provisions of the bill that provide tax relief in the area of bonus depreciation and capital expenditures, as well as the 5-Year carry back of net operating losses for small businesses
Rural Housing Service Rural Housing Service – The bill provides an additional $500 million to existing USDA Rural Housing programs. The RHS provides both a guaranteed loan program and a direct housing loan program for those meeting the program’s eligibility criteria. The direct loan program will receive $270 million while $230 million will be allocated for unsubsidized guaranteed loans. It has been reported that this level of funding would provide for an additional 192,000 homeowners.
Low Income Housing Grants - Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.
Tax-Exempt Housing Bonds - Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT). In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds.
Energy Efficient Housing Tax Credits & Grants - To promote green jobs and energy independence, ARRA invests significantly in efforts to make homes and buildings more energy efficient. The bill provides state and local governments with $6 billion in energy efficiency and conservation grants for energy audits, retrofits and financial incentives. Through 2010, homeowners will be able to claim a 30% tax credit (up from 10%) for purchases of new furnaces, windows and insulation. Another $5 billion will be available to modernize the nation’s electricity grid and install smart meters on homes that help to save consumers money. There is also $5 billion for weatherization assistance for low income households and $2 billion for federally assisted housing (section 8) efficiency efforts.
Transportation Investments - The bill provides $46.7 billion to states and localities for capital investment for surface transportation projects including highways, bridges, transit, and rail projects. NAR policy supports increased spending on the types of transportation infrastructure addressed in the bill with the exception of Amtrak and high-speed inter-city rail where NAR has no policy. These investments will tend to moderate traffic congestion and support a variety of transportation alternatives which will improve the quality of life of American communities and bolster the value of real estate.
Broadband Deployment - The bill creates $7.2 billion in grants to promote broadband deployment in unserved and underserved areas and for mapping the availability of broadband service in the U.S. Any entity is eligible to apply for a grant including municipalities, public/private partnerships and private companies as long as they comply with the grant conditions. The grants are subject to “network neutrality” requirements to ensure that broadband networks be free of restrictions on content, sites, or platforms, on the kinds of equipment that may be attached, and on the modes of communication allowed.
The bill also charges the FCC is with developing a national broadband plan that shall seek to ensure that all Americans have access to broadband capability and shall establish benchmarks for meeting that goal.
These provisions are important victories for REALTORS because increased broadband access promotes economic growth and expands opportunities for home sales. A 2006 Commerce Department report determined that property values are 6% higher in communities where broadband is available
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