Real Estate Information Archive


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New Tax Law Investors can Take advantage of.

by The Barringer Team


Some Rental Home investors may have a Temporary Window to take advantage of a Rare Tax Law just put in place by the I.R.S.

Government Affairs Update

by The Barringer Team

Here are NEW Government Incentives for

First-Time Home Buyers:

First-time Homebuyer Tax Credit

H.R.  3221  
Housing  and  Economic  Recovery  Act  of  2008  
Amount  of  Credit  
Ten  percent  of  cost  of  home,  not  to  exceed   
Eligible  Property  
Any  single-family  residence  (including  condos,  co-ops)  that  will  be  used  as  a  principal  residence.  
Yes.   Reduces  income  tax  liability  for  the  year  of  purchase.   Claimed  on  tax  return  for  that  tax  year.  
Income  Limit  
Yes.    Full  amount  of  credit  available  for  individuals  with  adjusted  gross  income  of  no  more  than  $75,000  ($150,000  on  a  joint  return).   Phases  out  above  those  caps  ($95,000  and  $170,000,  respectively).  
First-time  Homebuyer  Only  
Yes.    Purchaser  (and  purchaser’s  spouse)  may  not  have  owned  a  principal  residence  in  3  years  previous  to  purchase.    
Yes.   Portion  (6.67  %  of  credit)  to  be  repaid  each  year  for  15  years.   If  home  sold  before  15  years,  then  remainder  of  credit  recaptured  on  sale.  
Impact  on  District  of  Columbia  Homebuyer  Credit  
DC  credit  not  available  if  purchaser  uses  this  credit.  
Effective  Date  
Purchases  on  or  after  April  9,  2008 
July  1,  2009 
Interaction  with  Alternative  Minimum  Tax  
Can  be  used  against  AMT,  so  credit  will  not  throw  individual  into  AMT.



by The Barringer Team
Washington Report: New Housing Bill

The massive, 600-page housing bill heading to the White House is loaded with billions of dollars of new programs, financial assistance for troubled home owners, home buyer tax credits and even a new regulatory structure to oversee Fannie Mae and Freddie Mac.

 The Bill is missing things that could prove significant for certain home buyers -- primarily those who want FHA mortgage money.

Tops on the list: The final bill effectively kills the popular "downpayment assistance" programs run by companies such as Nehemiah Corporation and Ameridream, Inc.

The Bush administration had sought to ban seller-funded "gift" plans for more than two years, and finally got its wish last Wednesday when the House accepted Senate bill language making them illegal when used with FHA loan insurance.

Downpayment assistance works like this: When a buyer doesn't have enough cash for a downpayment, the home seller makes a "charitable contribution" to a nonprofit, tax-exempt organization. The nonprofit pockets a fee of $400 to $600 -- sometimes even more -- and "gifts" the needed downpayment money to the buyer.

Proponents of the plans say they've helped over a million low and moderate income families buy homes with FHA mortgages over the past decade.

But FHA officials complain that loans with downpayments funded by sellers go into default at two to three times the rate of ordinary FHA loans, in part because borrowers "have no skin in the game," in the words of FHA Commissioner Brian D. Montgomery.

Losses are higher as well, say officials, because sellers frequently add the cost of the "gift" onto the selling price of the house. Proponents challenge FHA's statistics and say appraisers must validate selling prices as part of the FHA underwriting process.

Another key item missing from the final legislation: FHA had lobbied Congress vigorously to authorize it to charge "risk-based" premiums on loans, just as private insurers do. Applicants with low credit scores and low downpayments represent higher risks of delinquency and foreclosure, and should be charged more than applicants with high scores and larger downpayments, argued Montgomery.

The House agreed, but the Senate clamped a one-year moratorium on FHA risk-based pricing in its version, which the House ultimately accepted.

Published: July 28, 2008

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The Barringer Team
Century 21 M&M and Associates
912 W 11th Street
Tracy CA 95376
Fax: 209-229-7426
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