About Brazos County, TX

Are you good with your hands?

Well my husband, Glenn, is. He can take some old fencing and in a couple of hours make

what he calls a Cowboy Cooler. He donated one to the booster club at our high school, A&M Consolidated.

He is donating one to our local Sister Cities, a student foreign exchange program, for a raffle to be held December 5, 2009.

One day I heard him at the printer making signs. "What are you doing?", I asked.

"Making a sign to put on the cooler," he said.

His sign read,

COWBOY COOLER

Donated by Brenda Harmon, Realtor, Century 21 Beal

A Loyal Tiger since 1981.

Wouldn't that be really nice?

You could file for the $8,000 first time home buyers' tax credit or $6,500 move-up/repeat home buyers' credit and then when you receive the money, go find a house and buy it and use the money you just received for the down payment. Sounds like a great deal.

However, if that was the case then it would probably be called the "Pre down payment advance, on the chance you'll buy for at least $80,000 and qualify, credit"

I can imagine the fraud department at the IRS having a lot of fun with that one!

But just because you can't get the credit in advance and then close on a home after you receive the check in hand, doesn't mean that your can't use the expectation of qualifying for the credit as collateral for a loan, which you can then use for the down payment.

There's a few ways to go about this.

1. You can use borrowed money from a family member or friend as the down payment and then after you close on a house and receive the rebate check you can then repay the loan. This of course is not without perils for the family member as they would need to make sure that you first qualify for the rebate and secondly that you will actually repay the loan once you receive the money. For each parties protection I would advise the use of both an attorney and a tax accountant. This is not a route I would encourage as many families and friendships have fallen apart over ‘good intention money borrowing'.

2. You can reduce the amount of income tax withholding up too $8,000 / $6,500 that is deducted from your paycheck each pay period and by accumulating this increased amount of take-home pay you can save the necessary funds for the down payment. By contacting your employer you would be adjusting the amount of income tax withholding on your W-4 or you could reduce the amount paid in your quarterly estimated tax payment. Again there are perils with this option. If you reduce the amount of income tax withholding paid during the year and the purchase does not occur at all or on time, then you would be liable for all of the payments due plus possibly interest and penalties. Alternatively you may not truly qualify for the credit and then you would still owe back income tax withholding plus penalty and interest. I would strongly advise consulting with your tax accountant before taking this route.

3. The safest option, if available in your state, is the Housing Finance Agency First Time Home Buyer Tax Credit Loan Program. Essentially the Housing Finance Agency (HFA) in your state will loan you up to the credit limits, provided you qualify for the credit, so that you can use this money as a down payment and/or closing costs. Most of these loans are short term, approximately 90 days and charge little or no interest.

Texas Department of Housing and Community Affairs (TDHCA) has such a program. This money can be used towards the down payment and/or closing costs for the purchase of a home and once you file and receive the rebate then you can use it to repay the loan. If however you don't repay the loan within the time prescribed then the penalties can be fairly high with monthly payments spread out over 2 years at 10% interest. More information regarding the Texas Statewide Second Lien Repayable Down Payment Assistance Loan Programs

Several other states also have similar programs available.

These states include

Colorado Colorado Housing and Finance Authority

Delaware Delaware State Housing Authority

Idaho Idaho Housing and Finance Association

Illinois Illinois Housing Development Authority

Kentucky Kentucky Housing Corporation

Maine Maine Housing

Massachusetts Mass Housing

Missouri Missouri Housing Development Commission

Nebraska Nebraska Investment Finance Authority

New Jersey New Jersey Housing and Mortgage Finance Agency

New Mexico New Mexico Mortgage Finance Authority

Ohio Ohio Housing Finance Agency

Oklahoma Oklahoma Housing Finance Agency

Pennsylvania Pennsylvania Housing Finance Agency

South Dakota South Dakota Housing Finance Agency

Tennessee Tennessee Housing Development Agency

Virginia Virginia Housing Development Authority

It is expected that this list will be expanded as more states create similar programs.

So In short the answer to the questions is yes, you can use the home buyers tax credit for a down payment or closing costs however it needs to be used indirectly.

For more questions answered regarding the first time / repeat home buyers tax credit read What is the home buyers tax credit catch? And Do I have to repay the home buyers tax credit?

As most of you already know the first time home buyers tax credit has been extended to April 30th, 2009 and expanded to include move up/repeat home buyers.

The following YouTube video produced by the National Association of Home Builders explains how the credit works.

For more questions answered read What is the home buyers tax credit catch? and Do I have to repay the home buyers tax credit?

A question that I have been hearing quite a lot lately is:

Do I have to repay the home buyers tax credit?

The answer is generally no you don't have to repay it, however, if you sell your home within 36 months after the date of closing or if during that period you no longer use it as your principal residence then yes you will have to repay the credit and the obligation becomes due the year you sell or otherwise no longer use it as your principal residence.

For more information on the expanded and extended home buyers tax credit, read What is the tax credit for home buyers catch?

BRYAN, TX — Well, I’m not really doing any major structural repairs…No one will notice if I add-on a little room here…The city is just out to make an extra buck on my renovations. Yes, we’ve heard all the excuses for not pulling a permit on your little bathroom upgrade.

Think about it from a community position, though. If you don’t visit the City of Bryan website to apply for a permit, you’re jeopardizing your good neighbors in the loss of utilities or phone services. The city makes it so easy now to mail in the short form I highlighted from the city website in the previous sentence.

There are more construction items requiring work permits than I have room or time for here. Some upgrades you might not think about are:

Water heater replacements

Sprinkler irrigation systems

Carports

The guys at the city are the experts on our safety codes. If you have a question as to whether or not a permit is necessary, call Greg Cox at 209-5010 or visit www.Bryantx.gov for answers.

Legally, the only reason you don’t have to disturb our friends in Planning and Development is if you are painting, installing cabinets, adding a children’s playscape, building a short fence, or placing a small storage shed on skids. Everything else has a safety concern…hence the need to call.