Very Vintage Vegas

Federal Housing Tax Credit Creates An Amazing Opportunity For First Time Homebuyers

April 5th, 2009 Categories: Las Vegas Real Estate News

I’ve been trying for weeks to get the real scoop on the $8000 Tax Credit that was part of the housing bill that was passed last month.

I’ve gotten different answers from multiple accountants and loan officers. Finally, The National Association of Homebuilders has put out a FAQ video that gives us the real answers.

Considering the ridiculously low prices that the foreclosed homes are selling for, this creates a huge opportunity to literally get PAID to buy a house.

As an example, using a $100,000 sale price, a buyer would need $3500 downpayment to do an FHA loan with a 3.5% downpayment. If the deal closes in the year 2009, a buyer could get a check from the government for $8000. six to eight weeks after filing to receive it. It can’t be used as downpayment, so the buyer will need to have the downpayment saved up first.

There’s some income limitations to get it, and it’s not just a blanket 8000. It’s actually 10% of the purchase price up to the 8000 limit. So a seventy thousand dollar home purchase would only generate a SEVEN thousand dollar credit. 

There’s also 2 different “3 year rules” attached to it. First, to qualify, you can’t have owned a home for the previous 3 years, which by their definition would make you a “first time buyer” once again. The second 3 year rule, is that you HAVE to stay the owner for 3 years or you’ll have to pay it back.

Interest rates are also at their lowest point in practically FOREVER, as well. We’re selling homes now at approximately 1995 prices. Last summer, I really thought that last summer (when prices had retreated to 2004 levels) that we were going to be done with the declining sales prices. It wasn’t even a thought that prices could retreat this much in order for the banks to unload that amount of foreclosed inventory. But they have.

I need to do a real RANT about it (in another post in a day or two), because the ridiculous pricing strategies are insane, and is FURTHER hurting the economy, when on the surface you’d think it would be helping. It is, if you’re buying, but not for anyone who currently owns.

In the meanwhile, here’s the whole and accurate story on the rules of the $8000. federal housing tax credit.

This entry was posted on Sunday, April 5th, 2009 at 12:07 pm and is filed under Las Vegas Real Estate News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. Bryan Wakefield said at April 6th, 2009 at 3:21 pm

   Jack,

   I am the Managing Principal for a tax and accounting firm in Maryland. We have been marketing heavily to people who have recently closed on homes in our area to help them file for the credit. So far I have filed 7 of these and have a book full of appointments for them through April 15th! Pretty amazing since the IRS only started accepting filings for the new credit last Monday. A few even said they called their regular tax service and were told their accountant would get to it when they had time or they could not do file for it this year.

   I’d be happy to answer any questions you or your clients may have regarding the credit. I have many long-distance clients : as far as California. We are very capable of working from a distance and could even help your Nevada clients file for quick receipt of their funds.

   Lets get real estate moving again!
   Bryan

2. Susie said at April 15th, 2009 at 9:42 am

   It is my understanding a person’s spouse can not be a home owner, even if one has not owned a home in over three years. Here’s my question. I’m going through a divorce and I have not been a homeowner in over 6years. However,my almost ex (in the process) has been a homeowner. Am I clear to purchase a home and get the tax credit?

3. “Vintage” Las Vegas Home Featured On Channel 8 News Report About 1st Time Buyer Tax Credit said at April 16th, 2009 at 2:16 pm

   […] More on the Tax Credit, see the post and the video that I posted last week that explains it in […]

4. Foreclosure Moratorium Ends Without Any Media Coverage - Good News? or Bad News? said at May 6th, 2009 at 11:19 am

   […] hoarding the inventory, they gave time for the buyers to gear up, for the administration to put the 8000 first time home buyer tax credit in place, and to clear out a lot of the already on the market inventory. As I’ve reported, the number […]

5. $8000 Las Vegas First-Time Home Buyer Tax Credit | FHA Mortgage Blog said at June 2nd, 2009 at 12:12 pm

   […] the low mortgage rates and property values aren’t enough to encourage Las Vegas First-Time Home Buyers to take advantage of some great property deals this summer, then the $8000 First-Time Home Buyer […]

6. Jonathan Paul said at October 13th, 2009 at 4:06 am

   While many housing groups support extending the housing tax credit, others worry that an extension would cause consumers to postpone their decision to buy, rather than responding the urgency of an expiring federal credit. Economists also suggest that expanding the credit to all buyers is less effective economically than the current first-time buyer requirement.

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