BIG NEWS - TAX CREDIT- First Time Home Owners and Current Home Owners getting CREDIT as SENATE PASSES 85 to 2 and the House voted 403-12!! Obama's signature is the last stop!

RISMEDIA, November 5, 2009-After two weeks of delay, the Senate cleared the way to pass a seven month extension and expansion of the tax credit for homebuyers. By an 85 to 2 roll call vote, the Senate voted to cut off debate on a package of measures that includes the homebuyer credit, making it virtually certain that the legislation will reach President Obama for his signature this week.

The homebuyer tax credit, due to expire at the end of November would be extended through April 30 of next year. First-time buyers who are in the process of making a purchase would not need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline.

For the first time, the legislation that was recently cleared makes move-up buyers as well as first-time buyers eligible for a credit. The $8,000 maximum first-timer credit will continue and will now be available to couples with income up to $225,000, a nearly $55,000 increase above the level in existing law. A new $6,500 maximum credit would also be available to move-up homeowners who have lived in their current residence for five of the prior eight years.

For homebuyers across the country, the expanded tax credit would allow more people to qualify for the credit. While two-thirds of American families own their own home, and most earn less than the income limits that have been established within the extension, more buyers may be eligible. Move-up buyers don't have to sell their current home to qualify for the new credit, but the money cannot be used to buy a vacation home. "It's only for a primary residence," said Regan Lachapelle, a spokeswoman for Sen. Harry Redi (D-Nev.), who helped engineer the deal. "In expanding the tax credit, we are helping first-time home buyers, as well as homeowners looking to move up to a new home, but we would exclude from the credit speculators who may have recently purchased a home intending to flip it for a fast profit," said Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee.

The tax credit has fired-up the housing market, driving existing home sales to the highest level in over two years. The National Association Realtors reported sales jumped 9.4% to a seasonally adjusted annual rate of 5.57 million units in September and are 9.2% higher than the 5.10 million-unit pace in September 2008.

Read more: http://rismedia.com/2009-11-04/senate-clears-homebuyer-tax-credit-extension-may-pass-as-early-as-this-week/#ixzz0W0xX8JQC

House votes to expand homebuyer tax credit

House votes to extend homebuyer tax credit into spring, expand it beyond first-time buyers

• By Stephen Ohlemacher, Associated Press Writer
• On 2:37 pm EST, Thursday November 5, 2009

WASHINGTON (AP) -- Buying a home is about to get cheaper for a whole new crop of homebuyers -- $6,500 cheaper.

First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package enacted earlier this year. But with the program scheduled to expire at the end of November, the House voted 403-12 Thursday to extend and expand the tax credit to include many buyers who already own homes. The Senate approved the measure Wednesday, and President Barack Obama is expected to sign it.

Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers -- or anyone who hasn't owned a home in the last three years -- would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30.

"This is probably the last extension," said Sen. Johnny Isakson, R-Ga., a former real estate executive who championed the credits.

The homebuyers tax credit is one of two tax breaks totaling more than $21 billion that was included in a bill extending unemployment benefits for those without a job for more than a year. The other would let companies now losing money recoup taxes they paid on profits earned in the previous five years.

"We are still in a world of economic hurt, and Congress must continue to act boldly and creatively," said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee. "With the right mix of tax breaks and investments we will get through this recession and get folks working again."

The real estate industry has been pushing to extend and expand the housing tax credit. About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

Extending and expanding the tax credit for homebuyers is projected to cost the government about $10.8 billion in lost taxes. While the measure passed the Senate by a 98-0 vote, Sen. Kit Bond, R-Mo., questioned its efficiency in stimulating home sales.

"For the vast majority of cases, the homebuyer tax credit amounted to a free gift since it did not affect their decision to purchase a home," Bond said. "And for the small minority of buyers whose decision was directly caused by the credit, this raises the question of whether we are subsidizing buyers who may not have been able to afford buying a home in the first place."

The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.

The credit would be extended an additional year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.

Expanding the tax credit for money-losing companies is projected to cost $10.4 billion.

The business tax break would allow money-losing companies to use current losses to offset taxable profits earned in the previous five years, giving them refunds of taxes paid in those years. Under current law, businesses with annual gross receipts of more than $15 million can claim losses back only two years.

The tax break would help industries suffering losses in 2008 or 2009, including retailers, homebuilders and newspapers. Congress included a scaled-back version of the tax break -- for companies with revenues of $15 million or less -- in the economic recovery package enacted in February. The new tax break would be available to companies of any size, providing a quick source of cash.

The U.S Chamber of Commerce has been a big backer of the tax break for money-losing companies.

"It frees up capital that they can use to maintain jobs and potentially even hire new people as the economy returns," said Caroline Harris, senior tax counsel for the U.S. Chamber of Commerce.

The tax breaks would be paid for largely by delaying a tax break for multinational companies that pay foreign taxes. It was passed in 2004 and originally was to have taken effect this year, but would now be delayed until 2018.

The bill is H.R. 3548

Using the $8000 First-Time Homebuyer Tax Credit As a Down Payment

Great news for first-time home buyers. This week, Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development stated that the Federal Housing Administration (FHA) is now going to permit it's lenders to allow home buyers to use the $8000 tax credit as a down payment. Previously, buyers had to wait to file their taxes to take advantage of the tax credit, which hindered some home buyers from buying.

This new program will further stimulate the already improving real estate market, attracting even more first-time home buyers.

There couldn't be any more incentives for first-time home buyers, considering that interest rates are at an all time low, home prices are not over inflated and there are plenty of homes to choose from. Sellers would have to give the home away for free for there to be a better deal. This is the absolute best time to be a first-time home buyer.

Consumer confidence needs a boost and I feel that this is just the news that will do it or at least light a fire. Now, if only the news media such as the TODAY Show would report on this great news instead of always reporting on the negatives about the real estate market, consumer confidence would increase.

If you are a first-time home buyer, get out there and find your home before this tax credit is gone in November.

As of Feb 25, 2009 you can get the $8000.00 tax credit when filing your 2008 tax returns. As long as you purchase your home after Jan 01,2009 through December 1, 2009

What You Need to Know About the $8,000 First Time Home Buyer Tax Credit

Who Qualifies for the Tax Credit?

• Never owned a home
• Have not owned a home within the last 3 years--determined by HUD 1 date when previous home was sold
• Purchased a home to be a primary residence between January 1 and December 1, 2009
• Owned a rental property or vacation home which was not used as a primary residence over the last 3 years
• If married and one person owned a home within the last 3 years, the other did not, they do not qualify
• If unmarried and one person owned a home within last 3 years and other did not, they can "designate" the tax credit to the one who is considered the FTHB.
• If parents cosign on a mortgage (and own a home) and the child is a FTBH, they are eligible for the tax credit.
• Non-US Citizens may qualify if they meet resident-alien status (IRS Pub 519)
• Revenue or Housing Bond financing are eligible for tax credits.

Types of Properties

• Primary Residence - Single family, 2-4 units (must occupy one unit) town homes, condos, manufactured homes, mobile homes and houseboats.
• New Construction - "Purchase Date" is the date the owner occupies the home (between Jan 1 and Dec 1, 2009) Note: They could have owned land and are in the process of building.

Income Limits

• $75,000 Single Person (Partial Credit up to $95,000)
• $150,000 Married Couple (Partial Credit up to $170,000)
• Based on Adjusted Gross Income (AGI) line on IRS Form 1040, 1040A or 1040EZ

Amount of Credit

• 10% of Sales price
• Up to Maximum of $8000
• Partial Tax Credit if income exceeds $75,000 or $150,000

Repayment Tax Credit

• If sold within 3 years, the entire tax credit needs to be repaid! After 3 years, no repayment is due.

Buyers should check with a tax advisor on how it will affect their individual tax returns

Thank you,

KS

This entry is specific to the Gulfport Mississippi Community along with Realtors and Builders that service that area; however, I believe it is necessary to point out some facts. MOST IMPORTANTLY, THIS PROGRAM WHICH GRANTS $50,000 TO QUALIFIED APPLICANTS HAS BEEN A FABULOUS OPPORTUNITY TO ACCELERATE THE SALE OF HOMES. Thank you to the Mississippi Development Authority and the Homeline personnel for their participation in giving people a ONCE in a lifetime opportunity to own a home.

That said, it is important that all parties to these transactions understand the layers and layers of documentation and guidelines that everyone must adhere to. Homeline must implement the program within its parameters in order to continue. Unfortunately, loans are like a finger print, none are exactly the same, every scenario is different. The lenders must first adhere to the lending guidelines, receive a fully approved loan. Now the loan must be submitted to Homeline with exact figures for income, calculations of taxes, insurance and monthly principle and interest figures. Income documentation is recalculated as well as debt ratios. The slightest adjustment can take a fully approved loan to one that does not meet the program guidelines. Additional time and effort on the part of everyone involved in the program is necessary; due to the logistics of funding there are specific deadlines, often the grant will not make the desired deadline.

It is imperative that our realtor partners, builders and sellers understand the extensive parameters that must be met to provide this incredible opportunity to our community. Sunny Mortgage is convinced this opportunity is worth the additional time and effort it takes or we would have chosen not to participate.

I am requesting on behalf of everyone participating in this program that all realtors, builders and sellers to join us in educating your clients regarding the additional time that may be necessary to expedite these sales. WE UNDERSTAND THE DIFFICULTY IN DELAYING A CLOSING AND LIKE EVERYONE CERTAINLY WANT TO EXPEDITE THE CLOSING AS QUICKLY AS POSSIBLE. HOWEVER, I FEEL THIS PROGRAM IS FAR TOO IMPORTANT TO OUR LOCAL ECONOMY AND REALIZE HOMELINE CAN NOT BE RUSHED OR THEY WILL POTENTIALLY LOSE THEIR OPPORTUNITY TO SERVE OUR COMMUNITY.

We at Sunny Mortgage Group are willing to extend an invitation to participate in a training seminar that would explain the entire process to assure full understanding of the time line involved. Call our office and ask for either April or Valerie 228-385-0551. Based on the number of applicants we may provide a monthly seminar.

Thank you , KS

We in the housing industry have a great opportunity to work toward the "Green Agenda". Since I had a first hand experience with Katrina, building homes that withstand higher winds, insulating features that both strengthen a home and lower the use of heating/cooling are a necessity. We can help to stimulate our economy and make a mark on saving the "Earth" for future generations. I hope this article gives positive food for thought.

By Andy Serwer, managing editor Fortune Investor Daily

NEW YORK (Fortune) -- I was thinking about the financial mess the other day and I came up with this theory. I'm wary of it because it's comforting, even uplifting, and by definition any economic supposition that has a happy ending is suspect. So with that caveat here goes:

I remember talking to a wise man at the end of the last decade who was pointing out to me how much the market had gone up during the 1990s and how stocks couldn't possibly continue to go up at that rate. The market's historical annual mean gain is about 8%, and yet between 1990 and 2000 the market had climbed some 15% per annum.

There is only one way to revert to the mean, the wise man pointed out, and that is for the market to go up less than that for quite some time. So we were looking at low single digit gains - or worse - for years.

But how could that be, I asked? Remember, the world looked pretty damn good back then. Sure tech stock prices were ridiculous, but other than that, what could possibly make the market tank? I have no idea, the wise man said, it's just very likely to happen.

And of course it did happen. First tech stocks crashed - and for sure, a few people saw that coming. But who envisioned the horror of 9/11 and its fallout? Who saw Enron, Worldcom and the wave of corporate scandals? Who saw Hurricane Katrina? And who saw this current financial meltdown. No one did. Back then our big concern was Y2K.

At the end of 1999 the Dow was around 11,400. Today the Dow is at 8,400, which means the index has fallen some 26%, a decline of almost 3% per year. With just one year left in this decade - even if 2009 is a humdinger - it is increasingly likely that first 10 years of this century will be one big washout for investors. A lost decade. (Just fyi, if the Dow had climbed up 8% a year from 11,400, the index would be over 22,000 now.) As for the Dow since 1990 - the entire 19-year period - the market has climbed on average some 6% per year.

The next big thing: Green tech?

So what does this mean for us going forward? Well, we don't really know, but we can make assumptions. First, at some point the carnage will end. The government and the markets will somehow figure a way out of this mess. Stabilization and confidence will return, and the economy will recover.

Second, at some point stock price returns will revert back up to the mean. In fact, to revert to the mean, stocks will at some point have to exceed the mean, in other words go up more than 8%. I know it could be years off, but you see my logic. It's just math.

And there's the rub. I believe that in order for the market to achieve a sustainable advance that is above the mean, we are due for some unforeseen positive event or events. Think about it. In the 1990s stocks went way up because of an unanticipated revolution in technology, i.e., networking and the Internet. In this decade we had a slew of unexpected negative events - bookended by 9/11 and this current meltdown. At some point, and it may be a few years from now, we will likely be subjected to an unforeseen positive.

What will it be? Of course no one knows. If we did, it would be priced in. But you could see how something like this might work. Take, for example, the discovery of a sustainable energy source or sources. You can see the incredible boost this would be to our economy and our markets. Imagine the geopolitical benefits. (And how it might defang our enemies.) Imagine the boost to our national psyche. And on and on.

I know you might think this is wishful thinking. And, of course, it is. Right now we are in for the toughest slog we've had in decades. We are going to have to sacrifice in unimaginable ways. It's probably even true that George Soros is right and that we are at the end of the era of American dominance. (That's okay. Who wants to dominate anyway?)

The bigger point is this: Somewhere over the horizon is an unrealized economic benefit that will lift us up in a way that right now, in the gloom, we can't even imagine. We have much work to do in the meantime, but some day it will come