Patrick AFB, FL

The President signed the bill to extend the homebuyers tax credit. The bill not only included an extension but also added credits for "non first time homebuyers".

The $8000 first time buyer credit was extended to purchases made from January 1st, 2009 - April 30th, 2010. The original expiration date was November 30th 2009. The credit is available to individuals that did not own a principle residence in the United States 3 years prior to the purchase of a home.

The new provision in the bill includes a credit for people that have lived in their former home for an extended period. If you purchase a new home and have lived in your previous home consecutively for 5 of the previous 8 years, you would be eligible for a credit of $6500.

One of the most important parts of this new bill is that the first time homebuyers credit for military personnel that have extended duty service outside of the US for at least 90 days from 12/31/08 - 5/1/2010 is extended another year until April 30th 2011.

So those of you PCSing to Patrick AFB, from overseas, in the next few, years will be able to take advantage of this tax credit.

The income limits on the tax credits are $125,000 - single and $225,000 married.

The government has added some anti-fraud provisions - you'll need to include you closing statement with your tax return.

This article is part of "The Patrick AFB Online Relocation Package".

Wow!!! For those of you PCSing to Patrick AFB in 2009 there is a huge benefit that just got passed in the stimulus bill: $8000. The fully refundable, $8000 (or 10% of the purchase price, up to $8000) is a tax credit for first time homebuyers that purchase a home between January 1, 2009 and November 30, 2009.

Here are the details:

What is a first time homebuyer?
Someone who has not owned a principle residence in the past three years. So many of you coming from overseas who have owned a home in the past, but have been living on base for three years will still qualify.

Are there income limits?
Yes, $75,000 for singles and $150,000 for couples.

Will I have to pay this back when I sell the home?
If you stay in the home for three years you do not have to pay it back, anything less and you will have to pay it back. So this is a gift, a grant, free money. Well not exactly free the taxpayers are paying for it.

Here are some typical scenarios:

1. At the end of the year you typically owe $7000 in taxes, and from your withholding they have taken $7000. When you file your 2009 taxes, you will get a check for $8000, which you can use for whatever you want: furniture, clothes, vacation, etc.

2. At the end of the year you owe $7000 in taxes. From your withholding they collected $8000. In this scenario you would usually get $1000 refund check. With this tax credit you will get a refund of $9000.

3. You owe $7000 in taxes. They withhold $6000. In this scenario you would normally have to pay $1000. With the tax credit you will get a refund of $7000 ($8000-$1000).

This money can not be used for a down payment, but will be refunded from your taxes. All you need to do to get this credit is claim it on your 2009 tax return.


With interest rates hovering around 5% (at the time of writing this), prices falling into affordable ranges, and this generous tax credit, this just might be the time to buy a home.

John S Murphy is a full-time REALTOR® with RE/MAX Elite in Melbourne, FL, and the creator of AmericanAirmanHomes.com, a website that specializes in Military PCS, DoD, civilian, and retired military relocations to and from the Patrick AFB area in Florida. Please feel free to visit the website where you can search the entire Brevard County MLS.

This article is part of "The Patrick AFB Online Relocation Package".

Once again this year Walt Disney World is offering their Armed Forces Salute. It is a great deal for active and retired US Military. Disney World is only an hour trip from Patrick Air Force Base, and it is a deal that many service members should explore.


Here are the details from the Disney Website:

"Through December 23, 2009, each active or retired member of the U.S. military may obtain one complimentary 5-day "Disney's Armed Forces Salute" ticket with Park Hopper® and Water Park Fun & More options. This ticket is valid for five days of admission into the four Walt Disney World® theme parks, plus a total of five visits to a choice of a Disney water park, DisneyQuest® Indoor Interactive Theme Park or certain other attractions. During this offer period, active or retired U.S. military personnel (or their spouses, but not both) may also make a one-time purchase of up to a maximum of five 5-Day "Disney's Armed Forces Salute Companion" tickets (one theme park per day) for $99 per ticket, plus tax, for family members (including spouse) or friends. Although this ticket for family members and friends does not include either the Park Hopper® or Water Park Fun & More options, this ticket can be upgraded to add either such option, or both, for an additional $25, plus tax, per option. Actual prices may be less. All tickets and options are non-transferable and must be used by December 23, 2009.

Activated members of the National Guard or Reservists (with orders showing active status after January 1, 2008) and active or retired members of the United States Coast Guard are also eligible to participate in this offer."


Tickets and more information can be obtained from the ITT office at Patrick AFB. Building 415, Phone:(321) 494-5158

This article is part of "The Patrick AFB Online Relocation Package".

The new Patrick AFB BAH rates for 2009 are now available. There was a slight increase over last year and with the possibility of interest rates dropping to all time lows in the near future, 2009 might be one of the best buying opportunities in years.

2009 BAH Rates - Patrick Air Force Base

This article is part of "The Patrick AFB Online Relocation Package".

Many, if not most of my clients decide to use their VA benefit and go with a VA loan and for many reasons it's a great idea. Also many decide to do a 100% financing VA loan (no down payment) and I think that is a great idea too, but one that involves some risk.


One of the biggest advantages of a VA loan is that you can still do 100% financing. With all of the recent problems is the mortgage industry, 100% financing which was readily available a few years ago in many types of loans is no longer an option.

Another advantage is that there is no PMI (Private Mortgage Insurance) that gets added to your home payment. Typically PMI can cost between one half to one percent of the loan, according to the Mortgage Bankers Association of America. On a $150,000 home with 10% down the PMI can range anywhere from $56.25 to $112.50 per month added to your payment.

Although there is no PMI with a VA loan there is what is called the "VA Funding Fee". This paid by the veteran upfront so they contribute to the cost of their benefit. For discussions here will use the regular military rates for first time use of the benefit. Reserves and National Guard funding fees are a little higher.

- For 100% financing the funding fee is 2.15%

- For 95% up to 90% financing the funding fee is 1.5%

- For 90% financing or more the funding fee is 1.25%

The funding fee does not have to necessarily come directly out of the veteran's pocket. It can be paid by the seller through negotiation ,as long as all the seller total contributions don't exceed 4%. Most typically it just gets added to the loan. Here are some examples of this scenario:

$150,000 purchase price:


- 100% financing: $150,000 x 2.15 % = $3,225 (funding fee) so the veterans' total loan will be $153,225 ($150,000 + $ 3225).

- 95% financing: $150,000 - $7500 (5% down payment of $150,000) = $142,500. $142,500 x 1.5% = $2138 (funding fee) so the veterans' total loan will be $144,628 ($142,500 + $2138).

- 90% financing: $150,000 - $15,000 (10% down payment of $150,000) = $135,000. $135,000 x 1.25% = $1688 (funding fee) so the veterans' total loan will be $136,688 ($135,000+$1688).


The logical next question is should I do 100% or should I put money down. That depends on many factors, but the main ones are how long will you be staying in the home and does your house payment work into your BAH. Most of my clients will only be here at Patrick AFB for 3-5 years and under that scenario, 100% makes a lot of sense. Here is why:

Let's use the same $150,000 purchase price, you will need to sell the home in five years, and we'll use a 6.5% interest rate on the loan. The interest rate can be higher or lower, but we'll use this one for illustration purposes.

- 100% financing your monthly payment (P&I -just Principle & Interest) will be $968.49.

- 95% financing your monthly payment (just P&I) will be $914.21.

- 90% financing your monthly payment (just P&I) will be $863.96.

It looks like if you put down 10% you will be "saving" saving a lot of money, and if you plan on staying in the home for a long time you definitely will, but first you need to have $15,000 in available cash. The difference in the payment is $104.53 a month (100% vs. 90%) that that translates into $6271.80 over the five years. But you had to shell out $15,000 in cash to get the $6271.80 in savings and many of my clients prefer to hold onto their cash to use for other things. This is a personal decision and you have do what is best for your lifestyle.



Here is the one huge caveat with the above scenario. For obvious reasons a 100% VA loan has a lot of attractive qualities. But if you are staying in your home for a short period of time, there is risk. Under the above 100% scenario after 5 years (if you made all your payments and no extra payments) you will still owe $143,435. Assuming that the home's value stays the same, you will have $6,565 in equity at that point. ($150,000 (market value of the home) - $143,435 (balance of loan after five years) = $6,565)

Now you need to sell the home. The total costs for you to sell will be around 8% (estimate) of the selling price, which includes Realtor fees and other closing costs. In any scenario in order for you to break even, the home needs to appreciate at least 8% over those 5 years. If it doesn't appreciate that much or the home depreciates you will be digging into your equity. If the costs exceed the equity in your home you will have to pay the difference out of your pocket at the close of the sale. So the more equity you have, the better position you are in. If the home appreciates more than the 8%, then anything above that is money going into your pocket. Congratulations you have just made money in real estate, Mr. or Mrs. Monopoly.

So you can see there is definite risk involved, especially in the current market. The value of homes in the area has decreased dramatically since their highs of 2005. Are we at the bottom (we are closer to the bottom than we are to the top) and how much would a home purchased now appreciate in 5 years? If I had the absolute answers to these questions, I'd be a very rich man or be hosting a show on some cable business channel.