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Good News for First-time andMove-Up
Pittsburgh Home Buyers. Extension Signed into Law!
Download
IRS Form 5405 for the tax credit
Since the news on the impact of the economic recovery
act is changing rapidly. I will post what I learn
from trusted sources as soon as I hear. I will leave
up the prior reports, so that you can see what is
really happening.
November 6, 2009
President Barack Obama just signed the measure extending
the first time home buyer tax credit and adding key
provisions for others who would like to be in the
housing market.
The National Association of Realtors stated that
the terms of the new law sets higher income limits
for buyers, increasing the limit from $75,000 for
an individual to 125,000. Couples filing jointly will
have their income limits increased from $150,000 to
$225,000.
This law takes effect immediately upon signing. The
tax credit expires on April 30, 2009. Contracts must
be executed by that time, AND MUST ALSO close no later
than June 30, 2009.
In related news, the very popular PHFA (Pennsylvania
Housing Finance Agency) $5,000 upfront credit to cover
closing costs has lapsed as of late October. The bond
money that was available through this program was
used quickly. This was in effect, a zero-interest
loan to the buyer, providing $5,000 as up-front closing
costs, which were to be repaid by August 2010 from
the federal tax credit.
Although this bill has its share of detractors, stating
that the housing market will remain uncertain at the
time the credit expires, the stimulus has some real
advantages. It will, by its structure, stimulate purchases
of home related products (appliances, furniture and
other durable goods) for a long time after the stimulus
ends. The stimulus has also generated discussion,
awareness and demand for real estate, giving the market
momentum for those who did not before consider entering
the market. I also feel that the Legislature is very
market aware, and may make additional corrective measures
in the spring if it is warranted.
Jeff
Lunderstadt
February 16, 2009
The National Association of Realtors is in the process
of analyzing the bill’s language and have through
their lobbying efforts done the following:
- Make the $8,000 tax credit a TRUE credit, not a
zero interest loan
- Drop the home loan interest rates 125-150 basis
points
- Add $50 billion in foreclosure mitigation
- Fannie Mae will raise the cap on loans to investors
from 4 units to 10
Other existing items have been preserved:
- Mortgage interest remains deductible on federal
income taxes
- Real estate taxes remain deductible
- The $250,000/$500,000 capital gains exclusion also
remains
Jeff Lunderstadt
February 13, 2009
As you probably know, the Economic Stimulus Package
being sorted out in Congress is quickly approaching
being made into a bill that President Obama will likely
sign into law.
We have been watching this credit vary from $7,500
to $15,000 back to what seems to be a negotiated credit
of $8,000. We have also been listening to the discussion
about whether this is a zero interest loan or something
else. In this current incarnation, the credit would
NOT have to be paid back, if the home owner lives
in the home for at least three years. This is good
news for the very stable Pittsburgh housing market,
where real estate speculation is much less prevalent
than in other parts of the country.
Originally, this credit was for home purchases closed
no later than July 1, 2009, but has been extended
until December 1, 2009. This is designed to help first-time
home buyers (or those that have not owned a home for
at least three years) that make less than $150,000
combined or $75,000 individually to afford a home.
This component of the Economic Stimulus Package is
estimated to cost approximately $6.6 billion dollars
to US Taxpayers.
Although the Economic Stimulus Package has not been
passed into law, and is still in debate, I feel this
preliminary information should be passed along to
consumers, so that they may take advantage of the
current historically low interest rates available
for home purchases.
Please contact
me and your tax preparer with any questions about
how this may affect your future plans.
Jeff Lunderstadt
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