Readers: Here is yet another article detailing HUD's decision to let first-time home buyers to use the $8000 tax credit for down payment. It is coming soon!
Story courtesy of:
Nation's Building News Online for May 25, 2009
First-time buyers eligible for the $8,000 federal tax credit who apply for mortgages insured by the Federal Housing Administration may soon also be eligible for bridge loans or cash advances that they can use for the downpayment, closing costs or other loan expenses pending receipt of their tax credit check from the IRS.
The FHA change was announced this month by Housing and Urban Development Secretary Shaun Donovan. As many as half of all would-be first-time buyers do not have enough cash on hand for a downpayment and closing costs, according to building and real estate industry estimates. By advancing these buyers as much as $8,000 at closing, many more would be able to afford the purchase.
Officials at NAHB say the bridge loan feature could double the total number of home purchases stimulated by the 2009 tax credit program to more than 300,000, depending on how many private lenders and state housing agencies participate.
The new bridge loans and cash-advance features of the federal credit may not be available immediately through private lenders, mortgage industry leaders say. Among the key questions to be answered: Where will non-depository mortgage companies get the $8,000 in advance money to provide upfront to buyers? Although most major banks offer second-mortgage programs, the FHA guidelines stipulate that the tax credit advances cannot be secured by a lien on the property, but only by the tax credit to be received by the purchaser.
In the meantime, would-be buyers who believe they’re eligible for the credit should shift into high gear shopping for a house — the Cinderella closing date of Nov. 30 is looming — even if they will need a bridge loan or a cash advance to complete the deal. The odds are good that by the time they’re ready to get a mortgage and go to closing, at least some local FHA-approved lenders will be actively in the market with bridge loans.
(www.washingtonpost.com) Washington Post (5/23/09); Kenneth R. Harney
Wednesday, May 27, 2009
Tuesday, May 26, 2009
Home buyers may soon be able to use $8000 for down payment!
(Yeah, it looks like home buyers may soon be able to use the $8000 tax credit as down payment! HUD has been flip flopping on this issue recently....Read the story below for details)
Feds offer more help with down payments
By Greta Guest/Detroit Free Press (Courtesy of Lincoln Journal Star)
Saturday, May 23, 2009
With bargain prices, low interest rates and an $8,000 federal tax credit for first-time homebuyers, it seems like the perfect time to buy a first home.
But apparently, many potential first-time homebuyers aren’t getting the idea — and federal and state officials are looking to sweeten incentives.
The word from Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, is that the Federal Housing Administration will allow its lenders to let first-time homebuyers use the recently enacted $8,000 tax credit as a down payment.
Details are expected in the coming weeks.Going back to last year, the first enticement was a $7,500 tax credit that had to be repaid.
That didn’t inspire too many buyers.Then earlier this year, the $8,000 federal tax credit for first-time buyers was rolled out, a huge help for people who want to take advantage of local home prices at pre-2000 levels.
But the down-payment help is even better news. For buyers, it makes it easier to finance the home. For the housing market, it could get the ball rolling.
This represents an about-face from last fall’s decision under President George W. Bush to cut off down-payment assistance because these loans tended to default more than ones where the buyer put money into the deal.More buyers are using FHA loans as lending has tightened for conventional loans, so the impact could be wide. FHA requires a down payment of 3.5 percent.
FHA-insured loans make up more than 17 percent, according to its most recent market share report.It could take up to two months for the down-payment assistance plan to be available.
It would work by giving buyers short-term bridge loans, effectively fronting the tax credit at the closing table, Donovan said.
Feds offer more help with down payments
By Greta Guest/Detroit Free Press (Courtesy of Lincoln Journal Star)
Saturday, May 23, 2009
With bargain prices, low interest rates and an $8,000 federal tax credit for first-time homebuyers, it seems like the perfect time to buy a first home.
But apparently, many potential first-time homebuyers aren’t getting the idea — and federal and state officials are looking to sweeten incentives.
The word from Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, is that the Federal Housing Administration will allow its lenders to let first-time homebuyers use the recently enacted $8,000 tax credit as a down payment.
Details are expected in the coming weeks.Going back to last year, the first enticement was a $7,500 tax credit that had to be repaid.
That didn’t inspire too many buyers.Then earlier this year, the $8,000 federal tax credit for first-time buyers was rolled out, a huge help for people who want to take advantage of local home prices at pre-2000 levels.
But the down-payment help is even better news. For buyers, it makes it easier to finance the home. For the housing market, it could get the ball rolling.
This represents an about-face from last fall’s decision under President George W. Bush to cut off down-payment assistance because these loans tended to default more than ones where the buyer put money into the deal.More buyers are using FHA loans as lending has tightened for conventional loans, so the impact could be wide. FHA requires a down payment of 3.5 percent.
FHA-insured loans make up more than 17 percent, according to its most recent market share report.It could take up to two months for the down-payment assistance plan to be available.
It would work by giving buyers short-term bridge loans, effectively fronting the tax credit at the closing table, Donovan said.
Friday, May 22, 2009
Memorial Day
Memorial Weekend comes early this year. It just doesn't seem right! I am not ready yet for Memorial Weekend! For the last couple of weeks I've been confusing my dates. It seems like every one I've talked to has had the same experience. Isn't it funny how a holiday can affect us so much.
What are you doing for the holiday? Camping? Bar-b-queing? Going to a baseball game? The only peson I know that actually celebrates the true holiday is my grandfather. He is a Pearl Harbor survivor. He celebrates by going to his small town cemetary and participating in a ceremony. I am honored that there are men and women out there that have given their life so that the rest of us can live with the freedom that only we Americans have known. I urge each of you to find a way to pay tribute to a soldier this weekend!
God Bless America!
We cherish too, the Poppy red
That grows on fields where valor led,
It seems to signal to the skies
That blood of heroes never dies.
-Moina Michael
If you like history, I found a cool website about Memorial Day called Memorial Day History. Enjoy!
Tuesday, May 19, 2009
$8,000 credit for first-time home buyers driving local market
BY MATT OLBERDING/Lincoln Journal Star
Sunday, May 10, 2009 - 12:11:13 am CDT
You wouldn’t know it by looking at the latest statistics, but things seem to be looking up in the local real estate market.
Realtors say there’s lots of activity in the market, especially among first-time homebuyers. That interest is encouraged somewhat by historically low interest rates and home prices that in many cases are lower than they were a couple of years ago.
But the big driver seems to be the $8,000 federal tax credit for new buyers or people who haven’t owned a home for a couple of years.
“The $8,000 tax credit has been the stimulus it was intended to be, really,” said Andrea Schneider, a Realtor with Woods Bros Realty.
Schneider said she has been concentrating her efforts on the first-time homebuyer market, because, “that’s really the market that’s hot right now.”
Larry Zitek, owner of Coldwell Banker BancWise Realty, said he, too, has seen a pickup in first-time homebuyers.
Zitek, who is also vice president of Geneva State Bank, said he’s seen parents and other relatives “stepping up” to help with down payments so people can buy a house and take advantage of the federal tax credit.
For Fredrick Brewer, it was the economy, rather than the tax credit, that led him and his wife, Shari, to become homebuyers.
“We just knew with the economy that we might be able to get a fairly decent deal,” said the 23-year-old Brewer.
The Brewers bought a two-bedroom, two-bath house in southwest Lincoln in February for $102,000 — $5,000 less than the assessed value and only $6,000 more than the home sold for in 2004.
Brewer said the $8,000 tax credit hadn’t even been approved yet when he and his wife started looking for a home, so that was a bonus.
Another bonus: with interest rates so low, the Brewers are paying less in monthly mortgage payments than they did for rent for a town home.
Renewed interest among first-time buyers like the Brewers failed to move the local real estate market out of its funk in the first quarter, though.
Through March 31, there were 616 closed home sales through the local Multiple Listing System, which covers all of Lancaster County and parts of surrounding counties. That’s down more than 8 percent drop from the first quarter of 2008.
Still, there were some encouraging signs, said Doug Rotthaus, executive vice president of the Realtors Association of Lincoln.
“Definitely, January and February pulled the quarter down,” Rotthaus said. But he called March numbers “encouraging.”
Pending sales —sales with a signed purchase agreement but not yet finalized — were up more than 10 percent in March compared with March 2008.
“That’s encouraging,” said Rotthaus.
What’s not encouraging, though, is the market for sales of new homes, which continues to plunge to levels not seen in more than a decade.
There were only 64 new homes sold in the first three months of the year, down more than 35 percent from the same period last year, according to data from the Realtors Association.
“We’re still seeing (new home sales) lag behind,” Rotthaus said.
Schneider, who with her husband, Scott, owns Schneider Custom Homes, said she doesn’t expect any improvement in sales of new homes this year.
“Certainly our sales are going to be down this year, and they were down last year as well,” she said.
But even in the new home market, there was one bright spot: There were 21 sales of new homes priced at $159,000 or less, the same number as last year.
Duane Hartman, who owns Hartland Homes, which builds mostly affordable homes for first-time buyers, said his business is up through the first four months of the year compared with 2008.
“It’s not healthy, it’s not fantastic,” Hartman said. “But it’s better than it was, and that’s great news.”
Hartman said the fall and winter of 2008 were “about as bad as it’s ever been” for the new home market in Lincoln.
While the signs are encouraging that things are picking up, Hartman said he’s not yet ready to declare a recovery.
“I’m kind of holding my breath,” he said. Let’s just say I’m ‘cautiously optimistic.’”
Reach Matt Olberding at 473-2647 or molberding@journalstar.com
Sunday, May 10, 2009 - 12:11:13 am CDT
You wouldn’t know it by looking at the latest statistics, but things seem to be looking up in the local real estate market.
Realtors say there’s lots of activity in the market, especially among first-time homebuyers. That interest is encouraged somewhat by historically low interest rates and home prices that in many cases are lower than they were a couple of years ago.
But the big driver seems to be the $8,000 federal tax credit for new buyers or people who haven’t owned a home for a couple of years.
“The $8,000 tax credit has been the stimulus it was intended to be, really,” said Andrea Schneider, a Realtor with Woods Bros Realty.
Schneider said she has been concentrating her efforts on the first-time homebuyer market, because, “that’s really the market that’s hot right now.”
Larry Zitek, owner of Coldwell Banker BancWise Realty, said he, too, has seen a pickup in first-time homebuyers.
Zitek, who is also vice president of Geneva State Bank, said he’s seen parents and other relatives “stepping up” to help with down payments so people can buy a house and take advantage of the federal tax credit.
For Fredrick Brewer, it was the economy, rather than the tax credit, that led him and his wife, Shari, to become homebuyers.
“We just knew with the economy that we might be able to get a fairly decent deal,” said the 23-year-old Brewer.
The Brewers bought a two-bedroom, two-bath house in southwest Lincoln in February for $102,000 — $5,000 less than the assessed value and only $6,000 more than the home sold for in 2004.
Brewer said the $8,000 tax credit hadn’t even been approved yet when he and his wife started looking for a home, so that was a bonus.
Another bonus: with interest rates so low, the Brewers are paying less in monthly mortgage payments than they did for rent for a town home.
Renewed interest among first-time buyers like the Brewers failed to move the local real estate market out of its funk in the first quarter, though.
Through March 31, there were 616 closed home sales through the local Multiple Listing System, which covers all of Lancaster County and parts of surrounding counties. That’s down more than 8 percent drop from the first quarter of 2008.
Still, there were some encouraging signs, said Doug Rotthaus, executive vice president of the Realtors Association of Lincoln.
“Definitely, January and February pulled the quarter down,” Rotthaus said. But he called March numbers “encouraging.”
Pending sales —sales with a signed purchase agreement but not yet finalized — were up more than 10 percent in March compared with March 2008.
“That’s encouraging,” said Rotthaus.
What’s not encouraging, though, is the market for sales of new homes, which continues to plunge to levels not seen in more than a decade.
There were only 64 new homes sold in the first three months of the year, down more than 35 percent from the same period last year, according to data from the Realtors Association.
“We’re still seeing (new home sales) lag behind,” Rotthaus said.
Schneider, who with her husband, Scott, owns Schneider Custom Homes, said she doesn’t expect any improvement in sales of new homes this year.
“Certainly our sales are going to be down this year, and they were down last year as well,” she said.
But even in the new home market, there was one bright spot: There were 21 sales of new homes priced at $159,000 or less, the same number as last year.
Duane Hartman, who owns Hartland Homes, which builds mostly affordable homes for first-time buyers, said his business is up through the first four months of the year compared with 2008.
“It’s not healthy, it’s not fantastic,” Hartman said. “But it’s better than it was, and that’s great news.”
Hartman said the fall and winter of 2008 were “about as bad as it’s ever been” for the new home market in Lincoln.
While the signs are encouraging that things are picking up, Hartman said he’s not yet ready to declare a recovery.
“I’m kind of holding my breath,” he said. Let’s just say I’m ‘cautiously optimistic.’”
Reach Matt Olberding at 473-2647 or molberding@journalstar.com
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