Saturday, January 30, 2010
Those Who Wait Will Pay Thousands More This Spring
Waiting a few extra days or weeks to purchase a home this spring could cost buyers thousands of extra dollars as the office of Housing and Urban Development (HUD) implements several changes for loans guaranteed by the Federal Housing Authority (FHA).Coming just weeks before the April 30 deadline for the Home Buyer Tax Credit and just days after the March 31 expiration of the Federal Reserve Board's mortgage backed securities purchase program (which has kept home loan rates artificially low for over a year), these FHA changes make it even more important to act now to save big.Here are a few reasons why:On April 5th, the cost of required up-front mortgage insurance for loans guaranteed by the FHA will increase from 1.75% to 2.25%. For a borrower purchasing a $200,000 home with a $7,000 down payment, the up-front mortgage insurance will increase by $965. Up-front mortgage insurance is typically financed in the final loan amount so the impact to a monthly payment will be minimal but overall, the increase is still borne by the borrower both upfront and monthly.Later this spring, the amount of money that a seller can return to the buyer from their sale proceeds will be reduced from 6% to 3%. The reduction in these "seller concessions" can increase the amount of cash a buyer will be required to pay at closing by $6,000 for a home purchase of $200,000.
HURRICANE CITY ANNOUNCES AFFORDABLE HOUSING GRANT
HURRICANE, UT, January 21, 2010. The City Council of Hurricane today voted to establish an affordable housing grant to provide qualifying first-time home buyers with up to $2,000 towards closing costs. Approximately 70 Grants will be available in 2010. Each January, the City will announce the number of grants available for the current calendar year.
The objectives of the Grant are to (1) improve the affordability of home ownership for Hurricane residents who have not previously owned a home and (2) to further strengthen the local economy, preserving and creating jobs.
To be eligible for the Grant, home buyers and the property must meet certain criteria:
• Buyers must not have previously owned a home (i.e. within 3 years prior to closing)
• Buyers must use a USDA 30-year fixed rate loan (Rural Housing Guaranteed or Direct Lending program) to acquire the home
• Home buyers must occupy the subject property as their primary, permanent residence
• The property must not have been previously occupied, must be permanently fixed to a foundation, and must be located within Hurricane City limits
Prospective home buyers should pick up the Grant application form from Hurricane City Offices at 147 North 870 West. The form should be filled out and submitted to the Buyer’s approved USDA lender in connection with the loan application. When the lender has the USDA Commitment, the lender will fax documentation to the City to enable closing. The Grants will be awarded on a first-come, first-served basis.
“The Rural Housing Loan Program serves to identify borrowers who are in greatest need of assistance” noted City Manager, Clark Fawcett. “By teaming with USDA, we streamline the process of identifying and helping citizens who need help to acquire their first home.”
The objectives of the Grant are to (1) improve the affordability of home ownership for Hurricane residents who have not previously owned a home and (2) to further strengthen the local economy, preserving and creating jobs.
To be eligible for the Grant, home buyers and the property must meet certain criteria:
• Buyers must not have previously owned a home (i.e. within 3 years prior to closing)
• Buyers must use a USDA 30-year fixed rate loan (Rural Housing Guaranteed or Direct Lending program) to acquire the home
• Home buyers must occupy the subject property as their primary, permanent residence
• The property must not have been previously occupied, must be permanently fixed to a foundation, and must be located within Hurricane City limits
Prospective home buyers should pick up the Grant application form from Hurricane City Offices at 147 North 870 West. The form should be filled out and submitted to the Buyer’s approved USDA lender in connection with the loan application. When the lender has the USDA Commitment, the lender will fax documentation to the City to enable closing. The Grants will be awarded on a first-come, first-served basis.
“The Rural Housing Loan Program serves to identify borrowers who are in greatest need of assistance” noted City Manager, Clark Fawcett. “By teaming with USDA, we streamline the process of identifying and helping citizens who need help to acquire their first home.”
Thursday, March 12, 2009
American Recovery and Reinvestment Act of 2009: Homebuyer Tax Credit
The homebuyer tax credit is one of 10 key provisions of the American Recovery and Reinvestment Act signed by President Obama into law on Feb. 17, 2009.
The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.
The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.
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