Dallas, TX

My friend has been in the mortgage banking business for many years. In fact, he's been president of this-and-that mortgage banking association.

Here's his latest story:

A young pastor accepted the call of one of the enduring longtime medium churches here in Dallas. And it's associated with one of the major denominations.

Of course his wife and children came with him.

Now after 21 months of searching the real estate market, they found the home that would suit their family just fine -- near the church, near the wife's employment, and a stone's throw from the church-affiliated school they picked for the children to attend.

So the plan was to apply for and get an 80% FHA home loan. You know the ones that have rates of less than 5.50% for thirty years; the ones that if you haven't owned a home in three years, the government will give you an $8,000 tax credit.

Well all was going fine until the underwriter was checking out the couple's employment. The pastor had come to Dallas several months before his wife and children were able to move.

So even with a down payment of 20%, $20,000 more in cash left over in their savings account, the loan was denied. You see, they wouldn't count the wife's income because she had only been employed in Dallas for twenty-one months. They wanted her to show a full two years.

Explain to me how making a home loan to this couple was anything more than a minimal risk.

Can't do it...

But this and countless other examples of government over-kill is why this economy is in shambles and why lenders are taking back homes by the thousands.

Does the National Association of Realtors have lobbyist? Do they ever lobby anything? Or is their job to collect dues and dream up and print little brochures that they can sell the membership to give to potential buyers and sellers?

BILL CHERRY, REALTORS

Since 1964

DALLAS - HIGHLAND PARK

214 503-8563

WEB

The $8000 Homebuyer Tax Credit has been officially extended and expanded to include a new $6500 tax credit for move-up buyers. Dallas area first time homebuyers and move-up buyers now have until April 30, 2010 to obtain a written, binding contract and until June 30, 2010 to close the transaction.

Some of the details and guidelines for the homebuyer tax credit were changed slightly with passage of this new legislation. Some of the guidelines were loosened while others were tightened. And there is a sepearate set of guidelines for the new $6500 tax credit for repeat buyers as well.

EXTENSION OF THE $8000 FIRST TIME HOMEBUYER TAX CREDIT

The new legislation extends most of the guidelines of the previous $8000 first time homebuyer tax credit with the exception of the deadline extension, increased income limits and a few other details:

Guidelines that REMAINED THE SAME:

• Amount of tax credit remains the lesser of $8000 or 10% of the purchase price.
• Home must be primary residence that will be occupied by the owner. Investors do not qualify.
• The tax credit does not have to be repaid unless the homeowner sells the home in the first three years.

Guidelines that worked out BETTER for homebuyers:

• Deadline to obtain a WRITTEN AND FULLY EXECUTED CONTRACT is now April 30, 2010 and the transaction must CLOSE ON OR BEFORE JUNE 30, 2010. The previous program had no specific date to obtain a fully executed contract, but the deadline to close the transaction would have been November 30, 2009.
• MILITARY SERVICEMEMBERS who were on active duty overseas for a period greater than 90 days in 2008 or 2009 will be allowed until April 30, 2011 to claim the first time homebuyer tax credit.
• Income limits for single taxpayers raised from $75,000 to $125,000. The program phases out completely at $145,000.
• Income limits for married couples raised from $150,000 to $225,000. The program phases out completely at $245,000.
  

Guidelines that became MORE STRICT for homebuyers:

• Maximum purchase price cap is now $800,000. Previous program had no price cap.
• Requires written proof of home purchase in the form of a certified HUD-1 closing statement. Also, the IRS has more authority to conduct oversight on claims for the tax credit. The previous program was plagued with fraud since it did not require homebuyer to show any proof of purchase.

CREATION OF THE $6500 TAX CREDIT FOR MOVE-UP HOMEBUYERS

This is a completely new program that was passed as part of the legislation that expanded the first time homebuyer tax credit. Current homeowners who are "moving up" will quaify for the $6500 tax credit beginning with all purchases that close after November 6, 2009 and who meet the other guidelines listed below. Many of the guidelines and deadlines are the same or close to the same as those of the first time homebuyer tax credit:

General guidelines (beginning after November 6, 2009):

• Amount of tax credit is the lesser of $6500 or 10% of the purchase price of a new home.
• Homebuyer must have owned and lived in their previous home for at least five consecutive years out of the last eight years.
• Home purchased must be a primary residence that will be occupied by the homebuyer. Investors do not qualify.
• Maximum purchase price is $800,000.
• Tax credit does not have to be repaid unless the owner sells the new home in the first three years.
• Income limits are the same as for the $8000 first time homebuyer tax credit ($125,000 for single filers and $225,000 for married couples, phases out completely at $145,000 and $245,000 respectively).
  
• A written, binding contract must be signed on or before May 1, 2010 and the transaction must close on or before July 1, 2010. This is ONE DAY LATER than the deadline for the first time homebuyer tax credit for some reason, perhaps because simultaneous closings can often take two days to fully consummate.
• IRS will require proof of purchase for the new home and will likely require proof that the previous home was both owned and occupied by the homebuyer.

Stay tuned for some additional updates and some frequently asked questions. If you have any questions about the extension and expansion of the homebuyer tax credit, please email me.

NAR Frequently Asked Questions
Homebuyer Tax Credit Changes
National Association of REALTORS® Government Affairs Division
500 New Jersey Avenue, NW, Washington DC, 20001

Here are some of the most frequently asked questions on the changes to the Homebuyer Tax Credit

Question: Existing homeowner credit: Must the new house cost more than the old house?
Answer: No. Thus, for example, individuals who move from a high cost area to a lower cost area who
meet all eligibility requirements will qualify for the $6500 credit.

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a
new home. I have lived in my current home for more than 5 consecutive years and
am within the new income limits. I will go to settlement on November 20. If
President Obama has signed the bill by the time I go to settlement, will I qualify for
the new $6500 tax credit?
Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment
(when the bill is signed). There is no reference to the date of contract for the new credit. The
provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a firsttime
homebuyer but was not within the prior income limits at the time I
entered into my contract to purchase on October 30, 2009. I will be covered,
however, by the new income limits. If the new rules have been signed into law by the
time I go to settlement, will I be eligible for a credit?
Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill.
The income limit and other eligibility rules will look to your status as of the date of purchase,
which is the settlement date. So if the new rules have been signed when you go to settlement,
you should be eligible for the credit (or a portion of the credit if you're within the phaseout
range).

Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I
have found a home with a nonnegotiable
price of $825,000. Will I be able to use any
of the $6500 tax credit?
Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount
above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an
absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago year and have been renting
since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the
other eligibility tests?
Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you
will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000
and lived there until 2008 when he got a divorce. Whether John has been renting or bought in
the interim, he WOULD INDEED be eligible for the credit because he owned a home and
occupied it as his principal residence for 5 consecutive years out of the last 8 years. The
keyword here is "consecutive." As long as he lived in that house for 5 years straight what he
did since 3 years doesn't impact eligibility.

Question: I am an eligible firsttime
homebuyer. I entered into a contract to purchase on
November 1, 2009. Do I have to go to closing before December 1? How does the
extension date affect me?
Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as
if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30
(or July 1, worst case), the purchaser will be eligible for the credit.

_________________________________________________________________________________________________________________________

The Good Home Team

Keller Williams Realty #1 office in North Texas!

To Begin Your Home Search Please Click Here!

REALTOR BILL CHERRY

LEARN WHY HOMES DON'T SELL
________________________________________

REMEMBER THOSE BIG ADS BRAGGING ABOUT THEIR SALES?

Many of those who ran the big braggadocios ads about their real estate sales expertise have evaporated into thin air.

THEY'RE GONE...OUT OF BUSINESS!

You see, in reality their real estate prowess was nothing more than their own aberration. Anybody could sell homes back then, for goodness sakes.

BUT EVEN THEN, THE MAJORITY NEVER SOLD MORE THAN 10 HOMES IN THEIR ENTIRE CAREERS!

Now it's time to go back to using Old Faithfuls when you need a Realtor.

I'VE SOLD THOUSANDS! BEEN AT IT FOR 45 YEARS! SO WHO DO YOU WANT TO REPRESENT YOU?

Hands down, the most HANDS ON Realtor serving Dallas. Our Comparative Market Analyses are both free and reliable. We usually sell our listings in just 45 days!

SO HERE'S HOW YOU CAN LEARN WHY HOMES DON'T SELL!

Call or email for our CD titled "A REALTOR'S SECRET WEAPONS!" It's free, there's no obligation, and I'm holding a copy for you. CALL 214 503-8563 OR EMAIL cherrysells@aol.com and merely leave your name and address with my assistant. No salesman will call you unless you specifically request it.

Since 1964.
BILL CHERRY, REALTORS
9936 Windlake Circle, Dallas 75238
214 503-8563
FAX 214 666-9985

http://www.billcherryrealtor.com
http://www.eons.com/blogs/entry/514834-BILL-CHERRY-BIOGRAPHY

Biography selected by the editors of Marquis Publishing Co. for inclusion in the prestigious - WHO'S WHO IN AMERICA, WHO'S WHO IN BUSINESS AND FINANCE, & WHO'S WHO IN THE WORLD and of course, WHO'S WHO IN U.S. REAL ESTATE.

BILL CHERRY, REALTORS

DALLAS - HIGHLAND PARK

SINCE 1964

214 503-8563

The President will sign tomorrow an extension of the first time home buyer tax credit. The new legislation extends the credit until April 30 ,2010 to have a home under contract and it must close by June 30, 2010.

The $8,000 max remains the same.

In the bill is a new credit for existing homeowners who want to purchase a home. Buyers who have lived in their home 5 out of the last 8 years will be eligible for a $6,500 credit.

The income limits have been raised to $225,000 for a couple and there is a cap of $800,000 on the purchase price of the home.

Of course, you should check with your accountant or CPA to make sure you are eligible.

This is probably a once in a life time opportunity to get a tax credit for the purchase of a home and interest rates are extremely low so if you have been sitting on the fence it's time to get off!