Home Buyer Tax Credit to be Extended
A new bill, extending the first-time home buyer tax credit ($8,000) passed, and will likely be signed by President Obama within days. That’s good news.
The bad news is that this does not mean you should run out, purchase a home and expect to receive the credit, however.
What it means is that any first-time home buyer who was under contract to purchase a home on April 30, 2010 now has until September 30, 2010 to close on the transaction and receive the $8,000 tax credit. It also means that any existing home seller who was under contract to sell their home and was under contract to move up to a replacement property will receive their $6,500 tax credit, as well.
Maryland Homestead Tax Credit Info
Important!! New State Application Process for Homestead Tax Credit
The Homestead Tax Credits are provided by both the State and County to limit the annual increase in taxable assessment on owner-occupied residential property. County Assessment increases are limited to 5% per year and State Assessment increases are limited to 10% per year.
What is this new application process?
As of January 1, 2008, the State will be implementing a new APPLICATION PROCESS for these credits. The implementation will be over a period extending to December 31, 2012. You will not have to apply for this credit every year.
When do I have to apply?
If your property is scheduled for reassessment in January 2010, your assessment packet will include an application for the Homestead Tax Credit. In order to continue to receive this credit, your application must be returned to the State by April 1, 2010.
Click here to find your Assessment Schedule.
If you purchase a new home in Howard County, the application will be mailed to you within six months of your purchase.
How do I apply?
There are a number of ways to apply.
Complete the application found in your assessment package and return it in the postage paid envelope provided to Department of Assessments and Taxation, 301 W. Preston St., 8th Floor, Baltimore, MD 21201.
Complete the application found on the State’s website at www.dat.state.md.us, using the Access Code provided in your assessment package and submit it online.
Complete the application found on the State’s website at www.dat.state.md.us, print it, and mail to Department of Assessments and Taxation, 301 W. Preston St., 8th Floor, Baltimore, MD 21201.
Download a blank application found on the State’s website at www.dat.state.md.us, print it, complete it by hand, and mail to Department of Assessments and Taxation, 301 W. Preston St., 8th Floor, Baltimore, MD 21201.
Call SDAT at 410-767-2165 or 1-866-650-8783 if you need to have an application mailed to you.
What happens if I don’t apply?
If you don’t apply, you will lose your Homestead Tax Credit. In Howard County, for FY08 the average County Homestead Credit was over $1,100.00. If you lose your Homestead Credit because you fail to apply in a timely manner, your credit will not be granted retroactively, although you will be able to get the credit in the future once the application is complete.
ALERT: You may still qualify for the 2010 Home Buyer Tax Credit
Still Bringing the Dream of Homeownership Within Reach
Tax Credit Extended beyond 2010 for Qualified Members of the Military, Foreign Service and Intelligence Community
This extension has been largely ignored by the mainstream media — here’s your ALERT!
Congress has acknowledged the unique circumstances affecting qualified members of the military, the foreign service and the intelligence community by making the following exceptions that apply to both the $8,000 tax credit for first-time home buyers and the $6,500 tax credit for repeat home buyers.
SUMMARY OF DETAILS
Under the Extended Home Buyer Tax Credit, which became effective on November 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—could receive the maximum tax credit. The credit was available for qualified purchases with a binding sales contract in place on or before April 30, 2010 and closed by June 30, 2010.
However, for qualified service members who are ordered on a period of official extended duty, these dates are extended for one (1) year. For these home buyers, the tax credit applies to sales with a binding sales contract in place on or before April 30, 2011 and closed by June 30, 2011.
A person who is forced to return to the U.S. for medical reasons before completing an assignment of at least 90 days of qualified official extended duty outside of the United States may qualify for this one-year extension.
DEFINITIONS
“Qualified service member” means a member of the uniformed services of the military, a member of the Foreign Service of the U.S. or an employee of the intelligence community.
“Official extended duty” means any period of extended duty outside of the United States for at least 90 days during the period beginning after December 31, 2008 and ending May 1, 2010.
If you qualify and are considering a purchase or move-up in Maryland, please contact me immediately at 410-715-2724.
HAFA (Home Affordable Foreclosure Alternatives) Update
On March 26, 2010, the government updated the HAFA guidelines and some associated forms. You may click here to open the .pdf for a full description of the program and changes.
The Basics – What is a Short Sale?
A short sale is a transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the current homeowner. In some cases, the difference is forgiven by the lender, and in others the homeowner must make arrangements with the lender to settle the remainder of the debt. However, under the new HAFA guidelines, a lender must now forgive the remainder of the debt… period.
Why is the Number of Short Sales Rising?
Due to the recent economic crisis, including rising unemployment, and drops in home prices in communities across the nation, the number of short sales is increasing. Since a short sale generally costs the lender less than a foreclosure, it can be a viable way for a lender to minimize its losses.
A short sale can also be the best option for homeowners who are “upside down” on mortgages because a short sale may not hurt their credit history as much as a foreclosure. As a result, homeowners may qualify for another mortgage sooner once they get back on their feet financially.
Financial Incentives for Both Borrowers and Lenders
√ $3,000 for borrower relocation assistance;
√ $1,500 for servicers to cover administrative and processing costs;
√ Up to $2,000 for investors who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders, on a one-for-three matching basis;
√ Requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy, consistent with investor guidelines. The policy may include factors such as the severity of the potential loss, local markets, timing of pending foreclosure actions, and borrower motivation and cooperation.
Read full details of HAFA’s Supplemental Directive 09-09 Revised 032610
Latest Breaking HAFA News & Video
What does HAFA mean to buyers and sellers? Simply put, on April 5, 2010 almost 90% of mortgage servicers (lenders) will be required to comply with this program that is designed to assist sellers who are underwater with their mortgages.
Here a a few points to keep in mind:
√ NOT every Short Sale will be a HAFA Guidelines Short Sale. Remember, these are guidelines not laws;
√ A borrower does NOT have to go through the HAMP Loan Mod process to qualify for a HAFA Short Sale. In other words, they can simply request a Short Sale (or DIL);
√ NOT every lender is participating, although 100% of those participating in HAMP will be and approximately 90% of current loans will qualify for a review;
√ There will be standardized, uniform forms… otherwise known as ‘the package’. As these forms become available, they will be posted on this blog for your review;
√ Lender will tell you the NET they need upfront;
√ Borrowers (sellers) MUST list with an agent. No FSBO’s (for sale by owners) may participate in a HAFA short sale;
√ Lenders have 10 days to approve/accept or request an extension to all offers;
√ If the lender (servicer) doesn’t accept a Short Sale offer, they must explain why, in writing;
√ Fannie Mae and Freddie Mac HAFA guidelines are coming;
After you have watched this video, you’ll begin to understand why 2010 is the year of the short sale and that the relief you’ve been waiting for is just around the corner!
Uncover Neighborhood Details — Anywhere in the US!
Here’s a very handy resource that will allow you to conduct research on neighborhoods, schools, establishments and home values in the community of your choice.
When you click here a new window will open in your browser, and the tool’s entry screen will be displayed.
My Most Frequently Asked Question
What is the question I hear most often?
“Is now a good time to buy a house?”
This video pretty well sums up my answer, except for the tag line, “If I knew the answer to that, I’d be a rich man.”
Energy-Efficiency Home and Vehicle Tax Credits
Did you know that making certain specific energy efficiency upgrades to your home during 2010 can lower your federal tax bill as well as your energy bills?
That’s right. You’ll get an outright tax credit of up to $1,500 max. or 30% of each qualifying upgrade. Let’s take two examples:
1. if the total cost of all your qualifying upgrades comes to $4,000, you will receive a tax credit of $1,200. ($4,000 x 30%)
2. if the total cost of all your qualifying upgrades comes to $7,500, you will receive the maximum allowable tax credit of $1,500. (although $7,500 x 30% equals $2,250, you are exceeding the maximum credit of $1,500.
Click here for full details and act before the end of 2010. Consult with your tax advisor or accountant before making any decision.
Making Home Affordable
Click the box above to go directly to the web site, where you can see more details and discover if you qualify for refinancing or loan modification relief.
Click here for more information. Act now to get the help you need.
On April 5, 2010 new HAFA regulations take effect. HAFA is designed for homeowners who are participating in the HAMP program, but are still falling behind with their mortgage payments. In summary, HAFA will allow you a clean “exit strategy” via a pre-approved short sale, forgiveness of debt, minimal impact on your credit and $1,500 in your pocket for relocating. Stay tuned. I’ll be posting brochures, guidelines and FAQs over the next several days.
Metro Referral Associates, Inc.
