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Florida mortgage borrowers received some great news regarding the First-Time Home Buyer Tax Credit extension.  Congressional members not only voted to extend, but they also expanded the credit, and the White House is expected to sign in the extension into law later today.

The expiration date for the new version of the First-time home buyer tax credit has been moved forward to the spring of 2010 – with home buyers in Florida and across the country required to be under contract by April 30, 2010, and to be closed by June 30, 2010.

For the most part, Florida mortgage borrowers can expect similar requirements as were part of the last tax credit:

• Buyers may not purchase their home from a spouse, parent, or child
• Buyers are not permitted to purchase the home from an entity in which they are listed as a majority owner
• Buyers may not receive the home through either a gift or inheritance
• All parties to the purchase must meet eligibility requirements

Important Updates to the New First-Time Home Buyer Tax Credit

Florida mortgage borrowers should note that there are a few new wrinkles in this latest iteration of the tax credit.  First, the definition of “first-time home buyer” has been expanded to include most homeowners with at least 5 years in their current home.  This is great for “Move-up” home buyers in Florida, as they can now stake a claim up to for a credit with the IRS of up to $6,500.

Other eligibility changes Florida mortgage borrowers need to be aware of include:

• The subject property sales price may not exceed $800,000
• The subject property must be a primary residence
• Income limitations have been raised to $125,000 for single-filers and $225,500 for joint-filer

And remember, folks -  this First-Time Home Buyer program provides Florida mortgage borrowers and other home purchasers with a true tax credit – not a deduction.  This means that you, as a tax filer will receive a cash payment of $2,000 from the U.S. Treasury if your “normal” tax liability totals $6,000 and you are eligible for all $8,000 available under the new law.

The complete list of qualifying criteria is posted on the IRS website.  Be sure to review it with a tax professional to determine your eligibility.  Then mark your calendar for April 30, 2009.

It’s 5 months away.

Technorati Tags: Florida Mortgage

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Florida FHA home loan applications and mortgage rate shoppers be on the lookout for a rules update from the FHA.

Starting November 17, 2009, the FHA will make it more difficult to qualify for its popular Streamline Refinance program.

Available only to homeowners who currently have FHA home loans, the streamline program helps reduce mortgage payments with little paperwork and few if any out of pocket borrower costs.

As such, the program does have a few “must meet” minimum eligibility requirements.

What’s so great about Streamline Refinance?  A lot.  See, the FHA Streamline Refinance is notable for what it doesn’t require from applicants.

• There’s no income verification
• There’s no asset verification
• There’s no employment verification
• There’s no appraisal required

In the past, qualifying borrowers just needed to meet a minimum credit score, have been current on your last 12 months of mortgage payments, and have a new loan amount that doesn’t exceed the original balance of your old loan.

The new program guidelines, however, are much stricter.

Effective November 17, 2009  – new requirements go into effect – including those requiring that applicants show evidence of employment and income, plus proof that they have any cash required at closing.

Furthermore, homeowners can’t finance closing costs into the mortgage without a complete home appraisal.  This requirement is HUGE… in that for areas of declining value, refinancing with the FHA may be impossible.

So, if you’re a homeowner with an FHA mortgage, contact me before the November 17 deadline to explore your Streamline Refinance options.  Mortgage rates are low and you never know for what you’ll qualify.

The worst thing you can do is to wait too long to find out.  Once the deadline passes, the old guidelines will be history.

Technorati Tags: FHA Home Loans, FHA Mortgage, FHA Streamline Refinance, Florida FHA Home Loan, Florida FHA Mortgage

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Received this heads up from Mark Madsen and felt it should be reiterated here.

Folks – hear this.

The use of the First-time Homebuyer Tax Credit for your FHA mortgage downpayment is NOT yet an option.  Just wanted everyone to be clear, as there has been a lot of discussion about this topic.

Those statements were made by the US Department of Housing and Urban Development secretary Shaun Donovan yesterday and a HUD/FHA letter was published on the website Monday night.  BUT……..the new DIRECTOR of HUD pulled that Mortgagee letter this morning and is no longer even available on the HUD website.  (Woops!)

Here is the link to all Mortgagee Letters:

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/ Notice ML 09-15 has been pulled!

This theoretical program is now off the table…….and should NOT be used until there is a real concept of how to offer to your borrowers with real answers as to where the money might come from.

IF you have any questions, don’t hesitate to call me.   Should anything come to market officially – I’ll let you know.

Before the use of the $8,000 First-Time Homebyer Tax Credit for your FHA downpayment happens, there will need to be:

1. State agencies approved WITH MONEY for the down payment
2. A Change to the HUD guidelines on the time frame that is allowable for a loan….currently must be amortized over 10 years with no balloon.
3. A change to the IRS guidelines allowing your refund to be assigned to a state or non-profit entity.

Technorati Tags: FHA Downpayment, First-time Homebuyer Tax Credit, HUD Secretary Shaun Donovan, ML 09-15, Mortgage Letter

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Get Downpayment Funds from Parents – Pay Them Back with Your $8,000 Tax Credit

One of the things holding most Winter Haven first-time home buyers back from purchasing a home is the 3.5% downpayment requirement for FHA mortgages.  Add closing costs to this total and many would be first-time home buyers – despite having jobs that can maintain monthly mortgage payments – simply can’t swing getting into a home at all.

With DPAs now a thing of the past, another source of downpayment funds for first time home buyers a home is a LOAN from an immediate family member. Although it cannot be a requirement of the loan, qualified first time home buyers can borrow the money from their parents and repay it with the $8,000 tax credit.

FHA Guidelines

FHA permits family members to lend 100% of the full amount of cash required to get into a home, including the down payment. There is no additional “cash investment” required from the borrowers.

Here are the details:

1. The loan can include some or all of the down payment, closing costs and pre-paids.

2. Funds must come from immediate family members only: meaning parent, grandparent, son, stepson, daughter, stepdaughter, legally adopted child, or foster child.

3. The loan can be unsecured or secured against the subject property. The lien on the property must be the family member lending the funds – not a third party.

4. Family members may borrow the funds, for instance, from their financial institution. The institution can place a lien on the parents’ property, but not the borrowers’ (subject) property.

5. The source of funds that the family member is using for the loan cannot come directly or indirectly from anybody with a financial interest in the transaction.

6. Payments, if applicable must be included in the debt ratio.

7. No balloon payments can be due within 5 years.

8. The CLTV can exceed 100% of the sales price (or value) of the property, but there can be no cash back to the borrower beyond a refund of earnest money deposit.

9. The first mortgage loan amount calculations are not affected.

10. A copy of the documentation is required before approval, and the executed paperwork must remain with the loan file.

This is for informational purposes only. Refer to Mortgagee Letter 96-58, and HUD Handbook 4155.1 REV-5, 1-13.E. for full details)

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Technorati Tags: $8000 tax credit, Downpayment, FHA, FHA Gift Funds, Winter Haven

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