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Homebuyer Tax Credit - Extended Deadline!
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Senate votes to extend US home tax credit deadline
June 16th - The U.S. Senate voted on Wednesday to give homebuyers another three months to settle on their contracts and take advantage of a popular tax credit that sparked a rush of activity in the housing market.
The Senate, with a vote of 60-37, accepted an amendment by Democratic Leader Harry Reid that extends the closing deadline to Sept. 30 for buyers who met the April 30 deadline to have a signed contract.
The current deadline requires buyers to close by June 30 to get the $8,000 tax credit for first-time homebuyers. Existing homeowners buying a new primary residence are eligible for a $6,500 credit.
Reid offered the measure as an amendment to a bill that would extend some popular business tax breaks and extend unemployment insurance benefits for jobless workers.
The proposal would not have a significant impact on future home sales as the extension would be only for home buyers who already had a contract in hand by April 30.
The popularity of the tax credit has caused some anxiety because settlement offices are inundated with buyers trying to close on transactions by the end of this month to get the tax break.
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THE FEDERAL HOMEBUYER TAX CREDIT IS HISTORY, but The California New Home Tax Credit offers homebuyers a Great Reason to Enjoy a Brand New home!
$10,000 NEW HOME TAX CREDIT! *
Qualified California homebuyers now have even more reason to purchase a Brand New Home- a new home tax credit of up to $10,000!* Funds for the new home tax credit are limited and available on a first-come, first-served basis.
Tax Credit Eligibility
The tax credit is available for the purchase of new homes which are in escrow and close between May 1 and December 31, 2010. Homebuyers must live in the newly purchased home as their principal residence for at least two years and satisfy the other terms and conditions of the tax credit.*
For information about New Home Construction, call Gracie & Greg at 760-285-1783 or 949-275-4008. Act FAST, before this opportunity is gone!
*The State of California is offering a new home tax credit of up to $10,000 or 5% of the purchase price of the home (whichever is less). The new home tax credit is available on the purchase of previously unoccupied homes which close escrow on and after May 1, 2010, and on or before December 31, 2010 (or on and after December 31, 2010, and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010). This tax credit is open to all homebuyers who live in their newly purchased home as their principal residence for at least two years and who satisfy the other terms and conditions of the tax credit. The purchased home must be a "qualified principal residence" under Section 17059.1 of the California Revenue and Taxation Code
The new home tax credit is applied over three tax years in equal amounts. The funds for the California new home tax credit are limited and available on a first-come, first-served basis. The California tax credit is subject to certain qualifications and limitations. For more information, including instructions on how to claim the credit and the remaining funds available, contact the California Franchise Tax Board (www.ftb.ca.gov).
This information is for general informative purposes only and does not constitute legal, tax, accounting, financial or other professional advice. Homebuyers should contact an accountant, attorney, tax professional or other advisor to discuss their particular circumstances and the applicability of the tax credit prior to making any purchase decision.
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Mortgage News
Home Buyer Tax Credit Extended for Military Personnel
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 The popular Home Buyer's Tax Credit has expired for all Americans, except for three very deserving groups: the brave men and women of the uniformed services of the U.S military, members of the Foreign Service of the U.S., or employees of the intelligence community who are actively serving outside of the U.S. on "official extended duty."
Official extended duty is defined as any period of extended duty outside of the United States for at least 90 days during the period beginning December 31, 2008 and ending before May 1, 2010.
That's right. Thanks to the Worker, Home Ownership, and Business Assistance Act of 2009, which was signed into law by the President on November 6, 2009, qualified military service members have one extra year to take advantage of The Homebuyer's Tax Credit of up to $8,000 for first-time buyers and up to $6,500 for certain repeat buyers. This means qualified military members must be under contract on a purchase by April 30, 2011 and close on the deal by June 30, 2011.
Qualified military buyers can also utilize this tax credit along with other available benefits from the Department of Veterans Affairs (VA), making this dollar-for-dollar tax credit extremely financially attractive with today's lower home prices and lower interest rates. That's because the VA allows qualified military borrowers to purchase certain homes in certain areas with no money down and no private mortgage insurance.
 To be a qualified first-time home buyer and receive a tax credit of up to $8,000, the buyer and his or her spouse cannot have owned a home in the last three years. Unlike the Home Buyer Tax Credit for civilians, however, the maximum purchase price of a home is $800,000 under this program; anything over that and the tax credit is invalid. The credit phases out for individual taxpayers with modified adjusted gross income (MAGI) between $125,000 and $145,000 or between $225,000 and $245,000 for joint filers.
To be a qualified "repeat buyer" or non first-time buyer and receive a tax credit for up to $6,500, a buyer must have lived in his or her current residence for five out of the last eight years. The rest of the requirements are generally the same as the $8,000 tax credit.
You served your country, let us serve you. If you or someone you know is looking to purchase a new home and may qualify for this incredible opportunity, please don't hesitate to give us a call right away.
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 If you know anyone who is looking to buy, sell or refinance a home, please forward their name and telephone number to us. We will happily provide the same high level of service that we have provided to you. The greatest compliment you could possibly give us is the referral of your friends and family. |
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What is a Certified HAFA Specialist?
The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) launched a program for real estate professionals to become Certified HAFA Specialists in California. The program was created in conjunction with AssetPlanUSA, a nationwide foreclosure alternatives solution provider. Program implementation date: April 5, 2010
California was hit hard by the housing downturn, and many homeowner's are in distress.
This certification program identifies real estate professionals who have chosen to specialize in HAFA. The program will likely be the most important short sale program in the nation.
Short sales, are a foreclosure alternative and have become an increasingly important part of the California real estate market. Home Affordable Foreclosure Alternatives (HAFA) is a "Making Home Affordable" Initiative. In these transactions, borrowers are allowed to sell their home for less than the full amount due on their loan.
HAFA is the first program to set nationwide standards for how short sale transactions should be conducted. The HAFA program should increase the volume and success rates of short sales and will set an important precedent for the market: Lenders should forgive the deficiency for borrowers who are forced to short sell due to documented financial hardship.
More than 100 servicers accounting for more than 90 percent of U.S. home loans serviced are signed up for the HAFA program, which is expected to be the largest short sale program in the nation!
Contact Gracie Nilson, Certified HAFA Specialist for a confidential appointment to find out more about this new govenment sponsored program.
949-275-4008
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Great News for California Homebuyers
$10,000 New Home and First-Time Buyer Tax Credits Available May 1
There's good news for California home buyers who want to purchase a home this year, but are unable to get under contract before the April 30th deadline for the Federal Government's $8,000 Homebuyer Tax Credit program. In late March, Governor Arnold Schwarzenegger signed legislation that will provide a state tax credit of up to $10,000 to Californians who are buying their first home or purchasing a brand new home.
Here are important details to know about this tax credit:
Dates: These tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011. The purchase date is defined as the date escrow closes. The tax credit will be applied in equal amounts over three years.
For both the New Home Tax Credit and First-Time Buyer Credit: A qualified principal residence must:
- Be a single family residence, either detached or attached;
- Be eligible for the California property tax homeowner's exemption, and
- Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.
In addition, for buyers to be eligible for the New Home Tax Credit, sellers must certify that the property has never been occupied. For purposes of the First-Time Buyer Credit, a first-time buyer is any individual who has not owned a home in the three years prior to purchase.
Eligibility: Taxpayers will not be eligible for either tax credit if the taxpayer (1) was allowed a 2009 New Home Credit, (2) is under 18 years old, (3) is related to the seller (or if the taxpayer's spouse is related), or (4) is a dependent.
This tax credit is available to buyers on a first-come, first-serve basis! The 2009 California Homebuyer Tax Credit ran out after just four months! For California residents planning to purchase a home in 2010, acting sooner rather than later could make a big difference in your wallet!
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Homebuyer Tax Credit
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Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits. To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive. Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.
Under the federal law slated to soon expire, a first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010. Additionally, under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied. The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)). California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)). Other terms and restrictions apply to both tax credits. |
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NO MORE STATE TAX ON FORGIVEN DEBT (applies to California)
Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification. Enacted into law yesterday, Senate Bill 401 generally aligns California's tax treatment of mortgage debt relief income with federal law. For debt forgiven on a loan secured by a "qualified principal residence," borrowers will now be exempt from both federal and state income tax consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.
"Qualified principal residence" indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.
The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.
Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.
For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board's Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service's Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of Senate Bill 401 is available at http://www.leginfo.ca.gov/.
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Foreclosure Rescue Scams
The possibility of losing your home to foreclosure can be terrifying. The reality that scam artists are preying on the vulnerability of desperate homeowners is equally frightening. Many so-called foreclosure rescue companies or foreclosure assistance firms claim they can help you save your home. Some are brazen enough to offer a money-back guarantee. Unfortunately, once most of these foreclosure fraudsters take your money, you lose your home, too.
You can save yourself money and more heartache by avoiding any business that:
* guarantees to stop the foreclosure process' no matter what your circumstances
* advises you not to contact your lender, lawyer, or credit or housing counselor
* collects a fee before providing any services (it is illegal to collect upfront fees)
* accepts payment only by cashier's check or wire transfer
* encourages you to lease your home so you can buy it back over time
* tells you to pay your mortgage payments directly to them, rather than your lender
* advises you to transfer your property deed or title to it
* offers to buy your house for cash at a fixed price lower than current comparables
* offers to fill out paperwork for you
* pressures you to sign papers you haven't had a chance to read or that you don't understand.
To Do:
Contact your lender or servicer immediately if you're having trouble paying your mortgage or you have received a foreclosure notice. You may be able to negotiate a new repayment schedule. Lenders generally don't want to foreclose; it costs them money.
Contact a credit counselor through the Homeownership Preservation Foundation (HPF), a nonprofit organization that operates a national 24/7 toll-free hotline (1.888.995.HOPE) with free, bilingual, personalized assistance to help homeowners avoid foreclosure. HPF is a member of the HOPE NOW Alliance of mortgage servicers, mortgage market participants and counselors. More information about HOPE NOW is at http://www.995hope.org/.
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The Basics: Short Sales
Due to current economic conditions, the number of short sale properties on the market is rising. The increasing number of short sales on the market presents challenges for REALTORS®. Below you'll find more information on: short sales and their challenges, the government's efforts to address these challenges, and tools to help you navigate the short sale process.
Home Affordable Foreclosure Alternatives Program (HAFA)
To help homeowners who are unable to keep their homes under the Home Affordable Modification Program, the HAFA program may make a short sale or a deed-in-lieu of foreclosure a viable option to help them avoid foreclosure. The HAFA Program, which will take effect on April 5, 2010, provides servicer, seller and junior lien holder incentives for these transactions and is designed to simplify and streamline use of short sales and deeds-in-lieu of foreclosure.
