Tax Credit for Homebuyers

Economic Stimulus Plan Benefits the Housing and Mortgage Industries
Revised February 17, 2009
Just signed and sealed…a $787 Billion Stimulus Plan made up of tax cuts and spending programs aims at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II.

Home owners and potential homebuyers stand to gain from key provisions in this stimulus plan. Here is what we know as of today…

The following discussions are intended for you to use directly with your client either in writing or verbally.

Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

Additional Housing-Related Provisions
Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing—This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance—This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

More Help for Homeowners in the Future
Another thing to keep an eye on in the coming weeks is President Obama’s plan to help struggling borrowers before they are faced with a default on their mortgage.

According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.

While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That’s because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.

The Economic Stimulus Plan is huge, and impacts a number of industries. I’ve highlighted some of the major provisions that may impact you now and in the future.

As always, if you have any questions or would like to discuss how this may specifically impact you, I’d be happy to sit down with you. Just call or email me to set up an appointment.

Fed Chair Ben Bernanke

Good Morning! Hope you’re off to a great week!

Last week in mortgage news we saw rates improve by about 0.25% to 0.375%. This was a result from Fed Chair Ben Bernanke and some bad news for the economy from several reports. Up and coming… the Economic Stimulus Package… do you know what to do with your tax rebates? See the tips below!

Oh by the way, if you have a family member or friend from work interested in buying or refinancing a home, I am never too busy for your referrals. Please call or email me their name and I’ll be happy to follow up with them!

Make it a great week!

-Sean

***Canadian / Foreign National Financing***

In the market this week it remains volatile with large gains and losses in mortgage bonds. Last week Bush approved the Economic Stimulus Plan and HUD has up to 30 days to determine the new conforming loan limits. I expect to hear next week or the week after. I’ll keep you informed as soon as that information comes out.

***Canadian / Foreign National Financing*** 30% down!! It’s so easy! Call me for details!

Oh by the way, I’m NEVER too busy for your referrals! Make it a great week!

Economic Stimulus Plan

Good Afternoon!

Attached is my weekly rate update.

Yesterday, the Senate approved, 81-16, an amended version of the Economic Stimulus Plan, which you can read by clicking the link below. Dallas Fed President Richard “Loose Lips” Fisher was speaking in Mexico City and mentioned inflation rising. Remember, if inflation is an issue, mortgage pricing will respond by increasing rates. As a result, this week interest rates are up about a .125%. The good news… we are still at 40 year interest lows!!

Part of the Economic Stimulus Plan is for to increase conforming loan amounts from $417,000. What’s this mean? For places like Coachella Valley, who have large inventory over the $417,000 price threshold, and for loan amounts between $417,000 and $625,000 now will be considered conforming loans and will decrease by 1.25%!! On a $625,000 loan amount that means a decrease by $505.06 per month on a 30 year fixed and $585.94 per month for a 5 year interest only!! THAT’S A BMW PAYMENT!! Check it out, do the math!! Now’s the time to get buyers off the fence so show them the money! Higher-end homes will be selling and I WANT to be doing your loans!!

Call me to find out how I can help your clients buy or refinance their home. I’m NEVER too busy for ANY of your referrals!! Make it a great weekend!

Click to see the Economic Stimulus Plan http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.05140: