Congress — both the U.S. House and Senate — passed the Homebuyer Assistance and Improvement Act of 2010 (HR 5623), which extends the Closing Deadline for Homebuyer-Tax-Credit eligible transactions to September 30, 2010 (instead of June 30).
This extension of the Closing Deadline applies only to transactions with ratified contracts in place as of April 30, 2010 but not yet closed.
Up to 180,000 homebuyers nationwide (including approx. 8,500 in Ohio) would have lost their tax credit had Congress not passed this extension.
What happened
The Senate approved the legislation – by unanimous consent – last night at 9:40 pm.
The House approved the legislation on Tuesday, June 29 by a vote of 409-5.
The legislation provides a seamless transition. There is no “gap” between June 30 and the time when the bill will be signed into law by President Obama (likely to occur today).
Government Affairs staff from the National Association of REALTORSâ worked vigorously with Congressional leaders on both sides of the political spectrum to get this legislation enacted.
The deadline for the First Time Home Buyer tax Credit is quickly approaching. The language of the legislation reads that the homes must be closed by November 30th, and many home buyers are not aware of the time it takes to complete a real estate transaction. On average I have seen transactions take 30-35 days.
HOWEVER those transactions did not have to contend with a lending system that is currently running slow, and an impending of new contracts and lending requests that are certain to enter the system in the upcoming weeks. Considering the current systemic challenges I am telling my buyers that mid October is their deadline for securing a contract on a home and qualify for the credit.
The bottom line is if you are waiting until the beginning of November to make an offer and qualify for the credit you may be risking $8,000. If you have have your eye on a home CALL ME TODAY at 518-1140, or send me an e-mail to schedule a showing.
The National Association of REALTORS is actively lobbying the U.S. House of Representatives for specific changes to the H.R. 1 Bill, The American Recovery and Reinvestment Act of 2009.
In 2008 Congress introduced a $7,500 refundable tax credit in the Housing and Economic Recovery Act of 2008 (H.R. 3221), the amount taken by a homebuyer is to be paid back over a 15-year period. The major change under H.R. 1, is that he $7,500 would become a full tax credit – the homebuyer would not have to pay it back.
Near the end of 2008 NAR presented Congress with “Unlock America’s Economy” – a stimulus plan aimed at the housing market.
NAR will continue lobbying Congress to:
1) make it a true tax credit (not an interest-free loan)
2) extend the credit to December 31, 2009, and
3) make it available to all buyers (not just first-time buyers)
Across the country local and state governments are enacting laws aimed at minimizing the eyesore of foreclosed homes, according to USA Today. Properties in foreclosure are often left uncared fore and fall into disrepair, leaving local municipalities with the responsibility of maintaining the property.
In Chicago, owners can use plywood to board up windows and doors for only six months. They must use real windows and metal doors if the home is vacant longer than that and install an alarm system. Garland, Texas requires a $2,500 bond from the property owners, which the city can access to maintain the home as needed.
We have not seen any new legislation come out pertaining to foreclosed homes in Cincinnati. Beyond discouraging squatting maintaining foreclosed homes in good order helps to keep the value of neighborhoods at fair market levels, a good proposition for all involved.
The Federal Hosing Bill that is working through the Senate and House right now are expected to have
sizable impacts on local economies and real estate markets like Cincinnati. The Housing Bill provides financial incentives like mortgage negotiation perks, $7,500 interest free short term loans, and Jumbo loan borrowers.
For those currently in debt and in trouble with their mortgage here are the incentives the government has set out for you to renegotiate with lenders:
1. Your loan must be at least 31 percent of your monthly household income.
2. Lenders, however, are not required to give you a better deal under the new law.
3. If you manage to get a new loan, you cannot take out a home equity loan for at least five years. 4. 4. You will also have to pay a 1.5 percent fee each year on the remaining balance.
5. Finally, you have to hand over no less than 50 percent of any appreciation on the home to the government once you sell. Sell the house in less than five years, and you will have to turn over as much as all of the gain.
Now about those $7,500 interest free loans being handed out. Well they are for first time home buyers and come in the form of a tax credit. How ever if your income is over $75,000 ($150,000 married) the credit begins to phase out. You will pay the loan back in 15 equal payments over the next 15 years to the Internal Revenue Service. The tax credit is retroactive to home purchases on April 9, 2008, and expires on July 1, 2009. Ask your accountant about this benefit in your 2008 return.
The Bill will also allow Fannie Mae and Freddie Mac to purchase and securitize loans up to $625,000 where in previous years the cap was $400,000. This increase comes in line with the increase of home prices over the decades.
