First Time Orange County Buyer Info

Thanks to Janice Eckles at MetLife Home Loans for helping to compile this information

First Time Home Buyer Tax Credit

One of the most exciting provisions of the American Recovery and Reinvestment Act of 2009 is the $8,000 tax credit available for first-time home buyers.  Combine this tax credit with the fact that home prices and interest rates are at historical lows, and it is indeed an ideal time for many first-time homebuyers to purchase a home!

Here are some things to keep in mind:

• A first time home buyer is defined as someone who has not owned a home in the last three years.
• The credit amounts to 10% of the purchase price of the home not to exceed $8,000.
• The tax credit does not need to be paid back if you continue living in the home as your primary residence for three years without selling it.
• The home must be purchased before December 1, 2009.
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.  The credit is phased out above these income levels.
• You cannot purchase the home from a related party like a spouse, direct ancestor, or direct lineal descendent (child or grandchild); however, you can still qualify for the credit if you purchase a property from siblings, nephews, nieces or others.
• If you are married, both spouses must be first-time home buyers.
• If more than one unmarried individual is buying the property, the credit can be split up among all the individuals who qualify.  However, the total credit taken cannot exceed $8,000.

One of the greatest benefits of the $8,000 credit is that you can claim it on your 2008 tax returns, even if you buy a home in 2009.  All you need to do is file an amended tax return with the IRS after you buy your new home and they will send you a refund check for $8,000.  Remember though, you’ll receive the $8,000 from the IRS AFTER you purchase the home, so you cannot use the funds to help with your down payment unless you purchase using an FHA loan.  On May 29, 2009 the Federal Housing Administration (FHA) announced that they will soon allow lenders to offer borrowers short-term bridge financing in amounts equal to the tax credit.  FHA will be publishing the details shortly.

First Time Home Buyer Mortgage Protection Program

The California Association of Realtors (C.A.R.) has launched a free program for first time home buyers.  Through the Housing Affordability Fund Mortgage Protection Program, first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month, for six months, to help make their mortgage payments. A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months. Program benefits also include coverage for accidental disability and a $10,000 death benefit.

“The Mortgage Protection Program was developed to help ease the anxiety of consumers who are concerned about potential job loss and its impact on their ability to pay their mortgage should they purchase a home,” said C.A.R. President James Liptak. “It also provides peace of mind to those buyers who are actively searching for a home.”

To qualify for the Mortgage Protection Program, applicants must:

• Be a first-time home buyer – someone who has not owned a home in three or more years
• Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009
• Use a California REALTOR® in the transaction
• Purchase the property in California
• Be a W-2 employee (cannot be self-employed)

To apply for the program, home buyers must request an application for the H.A.F. Mortgage Protection Program from their REALTOR®.

For more information including eligibility requirements and information on applying for the C.A.R.H.A.F. Mortgage Protection Program, please visit www.car.org/aboutus/hafmainpage/carhafmortgageprotection.

Tagged as: Mortgage Protection, Orange County Real Estate, Tax Credit