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NEW $8000 FIRST TIME BUYER TAX CREDIT

The U.S. Senate extended and expanded the home buyers' tax credit to help prop up the still-reeling housing market. Under the proposal, the $8,000 credit for first-time buyers would be extended to cover purchases into next spring – buyers must sign contracts by April 30 and close within 60 days. Currently the credit is due to expire at the end of November.

The Senate plan also expanded the program by offering a tax credit of up to $6,500 to current homeowners willing to buy a new home, provided they have lived in their current home for five consecutive years out of the last eight. It raiseed the income limits on those qualifying for the credit, from $75,000 to $125,000 for individuals, and from $150,000 to $225,000 for couples.

 

 

 

 

 

 

 

Daily Real Estate News  |  August 14, 2009  |

10 Cities Leading the Market Recovery
Here’s more evidence that housing is turning around. Forbes magazine identified 161 of the country’s largest metro areas where sales activity has increased compared to 2008, and where foreclosure sales as a percentage of total sales, are low.

The magazine considers these markets as on the road to recovery.
1. Miami-Ft. Lauderdale, Fla.
2. Lincoln, Neb.
3. Colorado Springs, Colo.
4. Salem, Ore.
5. San Luis Obispo, Calif.
6. Bremerton, Wash.
7. Denver, Colo.
8. Redding, Calif.
9. Santa Barbara, Calif.
10. San Jose, Calif.

Source: Forbes, Matt Woolsey (08/13/2009)
 

New Fannie Mae Guidelines for Second and Investment Homes

July 14th, 2008 categories: Buying Real Estate, Market Trends, Mortgage Help, Real Estate News

It seems that Fannie Mae, the private, shareholder-owned, NYSE-listed financial services company that serves the American home mortgage industry, has recommended new guidelines for lenders. These guidelines deal with buyers who are seeking to purchase a new primary residence while converting their old one into a second home or an investment property.

While this is only from one investor and not an official publication from Fannie Mae, he said that most other investors will fall in line or close to it on these new guidelines because they come from Fannie Mae. These guidelines are meant to ensure a borrower’s financial stability and help prevent future mortgage default and foreclosure.

While these new guidelines are not yet in effect, they could go into effect at any time. At issue is how mortgage lenders qualify borrowers for mortgages when they already have an existing mortgage on a primary residence.

Borrowers who currently own a home typically have three options when they decide to purchase a new principal residence. They can:

  • Sell the current residence and pay off the outstanding mortgage

  • Convert the property to a second home, assuming they can qualify with both the existing and new mortgage payments, or

  • Convert the property to an investment property and provide documentation that they will rent the property and use the income to offset the mortgage payment

These policies and guidelines are in place to ensure that borrowers have sufficient equity and/or reserves to support the existing financing and the new mortgage being originated. However, Fannie Mae is updating the policies for qualifying borrowers purchasing a new principal residence and converting their existing principal residence to a second home or investment property to better ensure that borrowers will be able to support both financial obligations.

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