The Real Estate world was hoping for the $15,000 tax credit that was provisioned in the Stimulus Bill of 2009 set forth by President Obama. Unfortunately, the House has negotiated to remove the $15,000 tax credit and replace it with a more moderate provision instead.
The 2009 Tax Credit is an $8,000 tax credit for First Time Home Buyers just like the previous tax credit fo $7,500 but even better mainly due to that you don’t have to repay this credit back.
Friday February 13th 2009, both the House and the Senate passed the American Recovery and Reinvestment Act of 2009 and President Obama is expected to sign it into law early this week.
$8000 tax credit highlights include:
- The $8000 tax credit is available only to first-time home buyers and primary residence only. (A first-time home buyer is considered a person who has not any ownership interest in a property in the last 3 years)
- This is a tax credit and not tax deduction. It is a true dollar for dollar reduction on taxes owed.
- The credit can result in a true tax refund! If, for example, you were to get back zero on your 2009 taxes and you qualify for the full $8,000 credit, you would then receive a tax refund for $8,000.
- The $8000 tax credit is available only to first-time home buyers buying a primary residence between January 1, 2009 and December 1, 2009
- The tax credit is not a loan and does not have to be paid back if owned more than 3 years
- Single taxpayers with an Adjusted Gross Income (AGI) up to $75,000 and married taxpayers with a joint AGI of up to $150,000 are eligible for the full $8,000 credit. A lesser tax credit is still available if your income is above these amounts.
This is Great News for First-Time Home Buyers in 2009!
If you are on the fence or need to borrow money from a family member who needs reassurance they will be paid back, this is a great resource to take advantage of.
For more information or if you want to get pre-qualified to buy a home feel free to contact me for more details
Home Mortgage Consultant
*I am not a tax preparation firm and the above information does not represent formal tax advice; please seek council from a tax professional for details on your personal situation.
FHA Refinances Cashout Require Two Appraisals now in 2009 over 85% LTV
Starting January 1st 2009 , Loans with FHA case numbers assigned on or after will require a Second Appraisal to be done for cash-out refinances greater than 85% LTV.
If you are refinancing two mortgages into one then its considered a Cash-out. The only exception is when the 2nd mortgage was used as a purchase and not as a cash out or HELOC.
Reverse Mortgages are the only exception to this guideline change.
Below are highlights to the changes.
- A 2nd appraisal is required regardless of loan amount or property location.
- The 2nd appraisal must be still be completed by a FHA approved appraiser.
- If 2nd appraisal is lower than 5% of 1st appraisal, the maximum mortgage amount will be based on the lowest appraisal.
- This does not change the current requirement for two appraisals on loans greater than $417,000 and LTV greater than 95%.
Please consult with a mortgage expert regarding these changes.
VHDA Changes to Maximum Qualifying Ratios
New Changes to the Maximum Debt to Income Ratio 50.00% for all VHDA Loans which was upped from 43%. This will allow more people to qualify with limited income. This is great news! Below are the official changes taking place Feb 2009.
All VHDA loans (including FHA, VA, RHS, PMI or uninsured loans) will be limited to a maximum of 50.00% debt to income ratio when using an automated underwriting Approve/Eligible Decision.
Stated program ratio guidelines will apply for manually approved loans. This new restriction is effective for loan reservations made beginning February 1, 2009.
FHA Plus: (103% Financing)
VHDA will continue to accept FHA Total Scorecard approvals for FHA Plus with the following limitations:
Loans may exceed FHA’s standard ratio requirements of 31% payment to income and 43% debt to income (to a maximum of 50% debt to ratio) only if the applicable credit score is 620 or above.
Credit scores below 620 and non traditional credit must adhere to the maximum 31%/43% FHA program ratios.
This new requirements are effective with loan reservations made beginning February 1, 2009.
Reminder: FHA Changes Effective Jan 1st 2009 Highlights
- Maximum LTV Financing: The required cash down payment will be 3.5% of the appraised value or the sales price (whichever is less). Closing costs may not be used to meet the minimum 3.5% cash down payment requirement.
- Maximum base mortgage amount: For purchase loans, the maximum base mortgage loan amount will be 96.5% of the appraised value or the sales price (whichever is less). (Upfront Mortgage Insurance Premiums (UFMIP) may still be financed in the loan)
- Maximum refinance LTV amount*: the maximum refinance LTV will be 97.75% of the appraised value. This LTV will replace the High-Cost/Low-Cost Factors in the maximum loan calculations.
Note: although a Mortgagee Letter has not been published as of the deadline for this article, the FHA previously indicated that 97.75% LTV will be published and effective on Jan 1, 2009. Any other changes announced in the Mortgagee Letter will be analyzed and communicated as soon as possible.
Note:At this time, the revised LTV does not impact: 203(h) for disaster victims & HUD 184 for Native American loans
Posted in 1st Time Home Buyer, FHA, Mortgage, News, Tips
Tagged 2009, Changes, FHA, Guidelines, LTV, Mortgage, Purchase, Refinance