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