Dawn Marie White, Broker-Office Manager

Point Pleasant Beach Jazz
and Blues Festival

Saturday, June 20, 2009

Buying a first home is a big step. Fortunately, trained professionals like your Realtor® are willing and able to help you through the process. In addition to the many benefits of homeownership, the homebuyer tax credit and more affordable prices make now an especially opportune time to purchase. Still, the commitment is a substantial one, and the National Asociation of Realtors® encourages you to ask questions and be informed about the decision you are making so that the home you buy is a home you can enjoy for years to come. As part of the Housing and Economic Recovery Act of 2008 and the American Recovery and Reinvestment Act of 2009, a First-time Homebuyer Tax Credit is now available. But this special tax break ends in 2009. A homebuyer tax credit has been available for first-time homebuyers in Washington, D.C. for many years, and now first-time homebuyers nationwide can take advantage of a similar benefit. In this article we'll discuss some of the provisions of the credit, changes based on the new legislation, and explain how to use it.

How big is the tax credit?

The tax credit is equal to 10% of the purchase price of your home up to $8,000.\

Am I Eligible?

First-time homebuyers who purchase a principle residence on April 9, 2008 and before December 1, 2009 are eligible. If you (and your spouse, if married) have not owned your principle residence for a 3-year period before your purchase, and you have never taken advantage of the DC firsttime homebuyer credit, you qualify as a first-time homebuyer.

How does it work?

Like all tax credits, it will directly reduce the When total amount of taxes you owe. you file your taxes, for the year you purchased your home (2008 or 2009), you will be able to subtract the amount of the credit from your Federal income tax liability, increasing the size of your refund or reducing the amount you owe. For example, you file your ‘normal' tax return and find that you owe $2,000 in taxes. With this credit, your tax liability could be lowered by $8,000-which means, you instead get a $6,000 tax REFUND check from IRS.

What about Repayment?

The American Recovery and Reinvestment Act of 2009 made a big change to the credit by removing the repayment provision for credits on homes purchased in 2009. Previously, the tax credit had a payback provision that made it similar to an interest free loan that would have been paid back in full over 15 years (repayment) or at the time of resale (recapture) unless the home was sold at a loss. While the repayment provision is completely gone from the updated credit, a more mild recapture provision remains. If you sell your home within 3 years of purchase, the entire amount of the credit is recaptured, that is, the government takes it back.

Are there other conditions I should know about?

You cannot claim both the DC and the ■■ national First-time Homebuyer tax credit.

■■ Purchases by non-resident aliens are not eligible.

■■ 2009 purchases financed by proceeds from a qualified mortgage issue are now eligible.

■■ Any single family residence located in the United States that will be used as a principal residence is eligible. Generally, this is the place where an individual spends most of his/her time. This includes single-family detached housing, condos or coops, townhouses or any similar type of new or existing dwelling.

■■ The credit will not result in an individual owing additional federal taxes under the Alternative Minimum Tax.

■■ Home purchases between relatives and other gifts of residences are not eligible for the credit.

■■ Other tax benefits of homeownership are still in place. The mortgage interest deduction, capital gains tax exclusion, and property tax deduction are some wellknown examples. For married couples filing jointly, the credit begins to phase out at an adjusted gross income of $150,000. The dollar amounts in the chart below correspond to a phase out of the full tax credit (percentages are for credits less than $8,000).

www.HousingMarketFacts.com for more information.

IRS guidance at

http://www.irs.gov/newsroom/article/0,,id=187935,00.html

For all of you camping and animal lovers out there here is some great information.

AIL-WAGGING NEWS FOR CAMPERS WHO LOVE THEIR PETS AND HATE TO LEAVE HOME WITHOUT THEM

(09/P10) TRENTON - Attention Fido, Fluffy and Felix: If your people are going camping in New Jersey this year, now you can go, too.

Under a pilot program launched today, campers can bring along their dogs and domestic cats when they book accommodations at select campgrounds in three state parks and forests, Department of Environmental Protection Acting Commissioner Mark N. Mauriello announced.

"For many people, dogs and cats are bona fide members of the family. Taking pets along can make a family vacation even more special, so we're delighted to offer this new option," Commissioner Mauriello said. "Responsible pet ownership is the key to making this program a success."

Pet-friendly camping is available at the following locations:

* Brendan T. Byrne State Forest: Family campsites 17 through 32

* Parvin State Park: Family campsites 45 through 56

* Wharton State Forest: Batona Camp, Goshen Pond Camp, Hawkin Bridge Camp and Lower Forge Camp

The pilot program will continue until Dec. 31, and no additional fees will be charged for using a pet-friendly campsite.

At each of the pet-friendly pilot sites, dog and cat owners must comply with people-friendly guidelines, including leashing, proper cleanup and disposal of pet waste, and discouraging barking and other noise. A maximum of two pets per camping permit will be allowed, and owners must be able to show proof of required pet licensing and necessary vaccinations.

In addition, dogs and cats are prohibited from all buildings, swimming beaches and swimming waters, and any campsites or overnight facilities not specifically designated as pet-friendly.

Campers who violate any guidelines could be required to remove their pets from park grounds.

The DEP's Division of Parks and Forestry will gauge the success of the pet-friendly pilot program by evaluating pet owners' compliance with the guidelines and gathering comments from all campers.

For more information, visit: www.njparksandforests.org

Please find a statement released by Jim Hall of The New Jersey Housing and Finance Agency

The NJHMFA's Prefund Tax Credit Loan Program (TCLP) is still available for qualified borrowers. The Prefund program lets first time home buyers borrow at 0% interest up to $5,000 of their anticipated federal first time home buyer tax refund to cover downpayment and closing costs. There has been inaccurate information circulating that the NJHMFA Prefund has been completely shut down pending a final determination by FHA about the insurability of FHA first mortgages with a subordinate Prefund second mortgage. The Prefund program is not tied specifically to the FHA insurance program. The NJHMFA is looking forward to FHA's authorization so that the Prefund program may be used with FHA first mortgages. FHA claims that the FHA Mortgagee Letter 2009-15 was a "draft" and was erroneously posted on their website and are in the process of reviewing and approving it. Until the approval is issued Lenders can not use Prefund with a FHA first mortgage. If a borrower can be qualified through the conventional market with a subordinate Prefund loan and private MI is obtained for the first mortgage, these loans can be registered with NJHMFA.

Dawn Marie White Broker-Manager-Sales Pro

www.njwaterfront.com

Your Jersey Shore Real Estate Connection