Tag Archives: Purchase

American Recovery and Reinvestment Act of 2009 Passes Tax Credit of $8,000 For Home Buyers




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

Justin Williams

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.


The New FHA Reverse Mortgage For Purchase – January 2009

Reverse Mortgage For Purchase

Reverse Mortgage For Purchase

January 2009 HUD instituted a new program for Seniors (Age 62 or older) to purchase a new principal residence and obtain a reverse mortgage within a single transaction by eliminating the need for a second closing.

The program was also designed to enable senior homeowners to relocate to other geographical areas to be closer to family members or downsize to homes that meet their physical needs, i.e., handrails, one level properties, ramps, wider doorways, etc

A Reverse Mortgage main concept is to have NO MORTGAGE PAYMENT.  Now HUD is saying that Senior Citizens can buy homes or downgrade to a smaller home without ever making another mortgage payment as long as they live.

The Benefits

  • The Housing and Economic Recovery Act of 2008 gives Unprecedented Consumer Safeguards With No Credit or Income Qualifications.
  • Lower Fees than before
  • Never Give Up Title to Home!
  • Never Owe More than Home’s Value!
  • Never Have to Move
  • Never Make a Payment aslong as you live or sell/move the house!

An Example

Senior has $125,000 in equity but wishes to move.  REALTOR lists and sells departure home.  REALTOR writes contract on new $350,000 home by combining $125,000 down payment with $225,000 reverse mortgage purchase money:


Reverse Mortgages are now becoming more and more suitable for Seniors and with the New Reverse Mortgage for Purchase, A Senior Citizen doesn’t ever have to worry about losing the house or making another mortgage payment.

Reminder: FHA Changes Effective Jan 1st 2009 Highlights

FHA Changes Highlights 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

FHA Sweat Equity – Alternative to FHA Down Payment Assistance 411

FHA Sweat Equity

FHA Sweat Equity

Labor performed or materials furnished by borrower before closing may be considered as the equivalent of a cash investment.
Believe it or not FHA Sweat Equity Program has been around forever.  The idea behind Sweat Equity is a way to have the Seller Credit for Purchaser’s Down Payment through Labor or Materials being put forth into the house.
Sweat equity may be gifted subject to both gift requirements and additional requirements. 
  • Existing construction – only the repairs or improvements listed on the appraisal are eligible for sweat equity. Any work completed or materials provided prior to the appraisal are not eligible.
  • Proposed construction – the sales contract must indicate the tasks to be performed by the borrower during construction.
  • Borrower’s labor may be considered as the equivalent of cash if the borrower can demonstrate his/her ability to complete the work in a satisfactory manner.
  • Lender must document the value of the labor through either the appraiser’s estimate or through a cost estimating service. 
  • Delayed work (on-site escrow), clean up, debris removal, and other general maintenance cannot be included as sweat equity.
  • There can be no cash back to the borrower in sweat equity transactions.
  • Sweat equity on a property other than the subject property being purchase is not acceptable. Compensation for work performed on other properties must be in cash and properly documented.
  • Sweat equity credit cannot exceed the estimated cost of the work or the materials.
  • Verification of source of funds used to purchase materials and market value of materials must be provided on any materials furnished by borrower.
  • Paid receipts for the materials should be obtained. 
  1. Buyers to get with the Contractors after an appraisal is done to lend “LABOR” to compensate for “Credit” towards down-payment.
  2. Buyers to paint the house or do some side jobs to help earn “Credit” for the “Labor”
  3. The Sellers will pay for the credit and can raise the sales price in order to compensate for the credit.

FHA First Time Home Buyer Cosigner Kiddie Condo Loan

FHA Mortgage Allows Non-Occupying Co-Borrowers or Co-Signers to help with the loan

The reason why this is a GREAT loan is because normally a  Co-Borrower must state that he/she will occupy the property with the Borrower on the loan therefore eliminating the potential of having co-signers due to the fact that the co-signers do not want to move.

FHA Mortgages although, allows a Non-Occupying Co-Borrower (Cosigner) to help in the loan process to help strengthen the loan and provide credit support and Income support as a co-borrower who does NOT HAVE to occupy the residence with the borrower.

*(Non-OCC’s)(Co-signers) can be on Refinances too but limited to 75-85% LTV rate/term & cashout)

  • The Co-Signer can be ANYONE from a family member to a long time friend.
  • 1 unit subject property
  • Having a Co-Signer can help Qualify the borrower to Appoved Status, keep in mind though the co-signer’s credit does not replace the borrower’s credit though.
  • The Borrower can do a FHA Streamline down the road to put the loan back in just their name to help ease the peace and mind of the co-signer.  The FHA streamline doesn’t require an appraisal and any income documents normally.

Why this is GREAT for your children

  • The parents want to help his son establish credit and provide housing for his son. What better way to do that than getting a home to help establish credit, become an investment, tax-writeoffs and of course provide housing for the son.
  • A lower, owner-occupied interest rate on the mortgage Vs the higher investment property interest rate.
  • Whether in College or after College, if you need to help out your children getting a kickstart in life, please consider an FHA Mortgage to help jumpstart his life rather than throwing money away renting.
  • Even better with the current market condition, you can probably snatch up a steal in a small beginner house with plenty of equity built in already.

Happy House Hunting!

New Construction Down Payment Assistance Program – Builder Grant 100% LTV

The Down Payment Assistance Program that has been here forever and is not going anywhere

Worried about the economy? Worried about Down Payment Assistance Programs are gone or on the rocks?

I still can provide Down Payment Assistance Programs STILL and FREE through our FREE Builder Grant Loans.

The way it works is just like any Down Payment Assistance Program you have used in the past (Nehemiah, Ameridream or Genesis)

Quick Recap for those who haven’t:

  • A Way for the Seller to contribute towards the down payment which is normally not allowed on Government or Conventional Concessions. Normal concessions only contribute towards Closing Costa dn Pre-paids.

Builder Grant Program Perks:

  1. Can contribute up to 6% of the Sales Price
  2. NO TRANSFER FEE (unlike most DAPS which charge between $300-$400 dollars)
  3. Transferred on the HUD at closing
  4. Less Paperwork and Less Stressful

So if you are a Builder or a Home Buyer looking for a new alternative to Financing New Construction Homes without giving away the bank and still want to take advantage of 100% LTV loans then contact me today for further information.

FHA Chapter 7 & 13 Bankruptcy Mortgage 411

Hope is not lost if you filed for Bankruptcy or have been discharged from a Bankruptcy.

FHA Bankruptcy

FHA Bankruptcy

Whats great about FHA loan programs is that they are backed by our Government, Easier to Qualify and help with Less than Perfect Credit borrowers.

FHA understands that nobody is perfect and realizes that filing for Bankruptcy does not mean your not applicable for credit.  FHA reviews all credit applicants based on your repaying profile and background.  Even though you may have had hiccups in the past as long as you are able to re-establish a track history of paid on time agreements or even document an isolated time frame that resulted in excruciating circumstance.

With that being said what can you do with borrowers who filed for Bankruptcy? Take a look below…

Chapter 13 Bankruptcy 411

  • Must have paid on time with the Bankruptcy for 12 complete months.
  • Must obtain permission for the courts to refinance or purchase a home.  Must have trustee sign off and finally the Judge to sign off final approval.  Typically the Trustee charges $500 added to the HUD statement at closing to deliver this permission for the courts.
  • Must establish 2-4 paid as agreed tradelines other than the bankruptcy.
  • Must write a letter of explanation why you filed bankruptcy and what steps have you done to correct your credit default.

Chapter 7 Bankruptcy 411

  • 24 months must pass from the time of Discharge Date of the borrower/spouse in order to apply for a FHA loan.
  • Must establish 2-4 paid as agreed trade lines other than the bankruptcy.
  • Must write a letter of explanation why you filed bankruptcy and what steps have you done to correct your credit default.

If you have any questions or comments please feel free to respond!