http://www.cnbc.com/id/35762827

November 6, 2009, Congress voted to extend and expand the First-Time Home Buyer Tax Credit program.  There’s 63 days left to claim it.

The expiration date of the up-to-$8,000 tax credit has been pushed forward to spring, requiring homebuyers to be under contract for a home no later than April 30, 2010, and to be closed no later than June 30, 2010.

In addition, “move-up” buyers were also added to the program’s eligibility list meaning you don’t have to be a first-time home buyer to be eligible for the tax credit.  If you’ve lived in your home for 5 of the last 8 years, you meet the IRS requirements.

Move-up buyers are capped at a total tax credit of $6,500.

The tax credit’s basic eligibility requirements remain the same:

• You can’t purchase the home from a parent, spouse, or child
• You can’t purchase the home from an entity in which they’re a majority owner
• You can’t acquire the home by gift or inheritance
• All parties to the purchase must meet eligibility requirements

The new law includes some notable updates, however.

First, the subject property’s sales price may not exceed $800,000. Homes sold for more than $800,000 are ineligible.  And, also, household income thresholds have been raised to $125,000 for single-filers and $225,500 for joint-filers.

And lastly, don’t forget that the program is a true tax credit — not a deduction.  This means that a tax filer who’s eligible for the full $8,000 credit and whose “normal” tax liability totals $5,000 would receive a $3,000 refund from the U.S. Treasury at tax time.

The complete list of qualifying criteria is posted on the IRS website.  Review it with a tax professional to determine your eligibility.  Then mark your calendar for April 30, 2010.

There’s just 63 days to go!

E-mail 

IRS clarifies the tax-credit paper chase

Despite back-to-back snowstorms that shut federal offices for days, the Internal Revenue Service issued new guidance last week on the two tax-credit programs that are powering the country's real estate markets -- the $6,500 credit for repeat buyers and the $8,000 first-time-buyer credit.

Filing Requirements - http://www.irs.gov/newsroom/article/0,,id=204671,00.html

2009 Tax Return

Because of the documentation requirements for claiming the credit, taxpayers who claim the credit on their 2009 tax return must file a paper — not electronic — return and attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit (see the instructions for help with the form), and a properly executed copy of a settlement statement used to complete the purchase.

• Purchasers of conventional homes should include a copy of Form HUD-1, Settlement Statement, or other settlement statement, showing all parties' names, property address, sales price and date of purchase.
• Purchasers of mobile homes who are unable to get a settlement statement should include a copy of the executed retail sales contract showing all parties' names, property address, purchase price and date of purchase.
• Purchasers of newly constructed homes where a settlement statement is not available should include a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.

Note Regarding Signatures: While the Form 5405 instructions indicate that a properly executed settlement statement should show the signatures of all parties, the IRS recognizes that the elements of the settlement document, often a Form HUD-1, may vary from jurisdiction to jurisdiction and may not reflect the signatures of the buyer and seller. The settlement statement that must be attached to the return is considered to be properly executed if it is complete and valid according to local law. In locations where signatures are not required the IRS encourages the buyer to sign the settlement statement prior to attaching it to the tax return even in cases where the settlement form does not include a signature line.

Long-Time Residents: The November 2009 legislation extends the credit to long-time residents of the same main home if they purchase a new main home. To qualify, eligible taxpayers must show that they lived in their old homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home. For long-time residents claiming the credit, the IRS recommends attaching, in addition to the documents described above, any of the following documentation of the five-consecutive-year period:

• Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements,
• Property tax records or 
• Homeowner’s insurance records.

check it out: http://www.fanniemae.com/newsreleases/2010/4923.jhtml?p=Media&s=News%20Releases

Let me know if you have any questions. More to follow...

* If you have a pending transaction and are planning to obtain this tax credit – please notify your Escrow Officer right away. This will help aid in getting the escrow authorization forms signed through closing (while we transition with this requirement).

IRS Releases New Forms, Instructions

The IRS has released IR-2010-006 providing a revised Form 5405 to reflect the changes to the tax credit made in the extension and expansion legislation enacted in November 2009. The release reminds taxpayers that all tax returns claiming the tax credit must be filed manually (i.e., they cannot utilize the IRS E-File automatic system). The revised form includes a section for those repeat buyers who are eligible to claim the $6500 tax credit. The HUD-1 or evidence of the transaction must be filed with all returns claiming the credit (both the $8000 and $6500 credits). Individuals who claim the repeat buyer credit must also provide evidence that they have owned and used the prior residence for five consecutive years. The instructions indicate that property tax or homeowners insurance records are sufficient for this purpose.

Click here for:

IRS release, instructions, and forms

The Home Buyer Tax Credit

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?
Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

As always, if you or anyone you know is looking to either buy or sell real estate anywhere in Central Oregon, please let me know.

WASHINGTON - The Federal Housing Administration (FHA) is raising fees and tightening lending standards to shore up its strapped finances and avoid a taxpayer bailout. The government agency has seen its losses rise with the foreclosure rate. Its reserves have sunk below the minimum level required by Congress. A healthy FHA is vital for the housing market because it insures roughly 30 percent of new loans, and is the largest backer of mortgages to first-time buyers.

The changes, which will go into effect in the first half of the year, "are among the most significant steps to address risk in the agency's history," FHA Commissioner David Stevens said in a prepared statement.

The FHA does not make loans, but rather offers insurance against default. Borrowers are willing to pay for the insurance because FHA loans only require down payments of 3.5 percent of the purchase price — and that didn't change.

The new policies, to be announced Wednesday, are designed to bring more revenue into the agency, while at the same time keeping loans available.

Under the changes, homebuyers will:

• Pay an upfront mortgage insurance premium of 2.25 percent of the total loan amount, up from the current level of 1.75 percent. A borrower taking out a $200,000 mortgage would pay a $4,500 fee, for example, rather than the current fee of $3,500. Borrowers will still be able to wrap these fees into the total amount borrowed. FHA officials also plan to ask Congress to increase the maximum annual premium that FHA can charge.
• Need a credit score of at least 580 to qualify. Many FHA lenders already require a higher score, but there had been no standard requirement across the program. Borrowers with a score lower than 580 will need a down payment of at least 10 percent.

The changes come as borrowers with loans backed by the agency have increasingly been falling into default. More than 18 percent of FHA borrowers are at least one payment behind or in foreclosure, compared with 14 percent for all loans, according to the Mortgage Bankers Association.

If you have any questions, or if you or anyone you know is looking to buy or sell real estate in Central Oregon, please let me know. I'm here to help.

So what will 2010 bring you ask? It remains to be seen what long term effect current policies will have on mortgage interest rates; it is very dependent on how well those policies work, how quickly we can burn through distressed inventory, and what happens if/when inflation kicks in. For certain we are in unprecedented times, so what we see today could be different tomorrow as World events (economies, terrorism, etc) now affect our markets more than ever before, and will continue to do so.

My predictions? Interest rates will likely remain low for the immediate future, especially since Fannie & Freddie have essentially been Nationalized; you & I are subsidizing low interest rates in hopes of stimulating the housing markets. Beyond about 6 months from now much could change. The short term trend over the past 30 days has been upward however, but overall, still very low.

There has been an amazing recovery of the U.S. dollar’s exchange rate against the currencies of most other major economic powers. According to information I received from B of A, as of last week, the dollar had regained all losses against those currencies since September of this year. What has fueled this resilient strength? The primary force is a belief that the economy is moving toward an increasingly sustainable recovery. This belief has had its ups and downs in recent months, of course, creating something of a roller coaster ride for interest rates (within a relatively narrow channel) and for commodity prices.

But there is more at work here. The unavoidable issue, even for those who have been certain that the dollar would continue to lose its exchange value, is that many foreign currencies look far worse than does the dollar and their countries’ economies appear to be far more tentative than ours. By contrast, the U.S. economy looks relatively strong.

Housing values, and an overall rebound in the housing market will occur…but when? Again, distressed inventories are affecting this big time, so much will depend on that. One thing is certain; every down-turn in the US economy has been followed by an up-turn; often the actual up-turn is in proportion to how bad the down-turn was. If that holds true we should see a better 2010 than 2009 in housing, followed by another increase in 2011, and again in 2012. I personally believe we will not return to boom times anytime soon, and hope for a slow and steady, sustainable, long-term recovery.

I hope this provides some assistance to you as we go forward into another year of a market that promises to be interesting and challenging! As always, if you or anyone you know is looking to Buy or Sell a home in Central Oregon, please feel free to give me a call at 541-923-3853.

Here’s to a better year for us all, and please enjoy a Happy & Safe New Year!

I’m here to help you with your Real Estate needs. If you have any questions, or if you want to look further into how easy it may be for you to buy or sell a home in Central Oregon, please let me know.

The Worker, Home Ownership, and Business Assistance Act of 2009 has extended the tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence. It also authorized a tax credit of up to $6,500 for qualified repeat home buyers. Get all the answers you need about the tax credit and the new addition to the tax credit by clicking on the appropriate link below. This has opened up the door for more and more people to take advantage of this possibly one time opportunity to get paid to buy a house. Please let me know if I can help you or anyone you know who may be looking to buy or sell a home in Central Oregon.

• Frequently asked questions about the $8,000 first-time home buyer tax credit.
• Frequently asked questions about the $6,500 tax credit for repeat home buyers.
  

Articles of Interest

• Awaiting decisions in a land use limbo | The Bulletin

http://www.bendbulletin.com/apps/pbcs.dll/article?AID=/20091026/NEWS0107/910260389/1041&nav_category=

• Sisters Featured as Top 100 Adventure Town in U.S. | National Geographic

http://www.cascadebusnews.com/index.php?m=2&s=106&id=808

http://adventure.nationalgeographic.com/weekend-getaways/oregon/sisters-travel

·         Bank failures top 100, only part of industry woes | The Associated Press

http://www.oregonlive.com/business/index.ssf/2009/10/post_14.html

·         Clock is ticking on first-time home buyer credit  | The Oregonian

http://www.oregonlive.com/business/index.ssf/2009/10/clock_is_ticking_on_first-time.html

·         Refinancing lifeline fails to reach most ‘underwater’ homeowners | The Washington Post (by Renae Merle)

A seven-month-old government program to help homeowners with little or no equity refinance their mortgages has so far reached fewer than 3 percent of those targeted, with many struggling borrowers deciding that the benefits of a new loan aren't worth the closing costs.

http://www.washingtonpost.com/wp-dyn/content/article/2009/10/23/AR2009102303472.html?referrer=emailarticle

09/10 Deschutes County Tax Information

http://www.co.deschutes.or.us/go/government/departments/assessor's-office/index.cfm

2009-2010 Tax & Assessment Help

• Tax & Assessment Summary (Updated 10/13/09)
• Tax Statement Insert (Updated 10/13/09)

To Contact Us:

• Reach us by phone at:  (541) 388-6508
• Fax us at (541) 382-1692
• Email your questions or comments to us at:  assessor@co.deschutes.or.us

**Property Value Appeals**
If you have questions regarding the values on your tax statement, the assessor's staff will be available to discuss the values with you. If you desire, an appraiser will review your appraisal with you and answer any other questions you may have. 

If after your discussion with the assessor's staff, you feel the market value shown on your tax statement is too high; we encourage you to file an appeal with the Board of Property Tax Appeals.

• The deadline to file your petition in person with the County Clerk's Office is January 4, 2010 5:00pm.  If you mail your petition it must be postmarked by January 4, 2010. 

• Petition forms to file your appeal are available at the County Clerk's office or you can find them online at The Clerk's website. The Clerk's phone number is (541) 388-6548.  They are located at 1300 NW Wall Street, Suite 200, in Bend.
  
  You can contact our office to receive a Petition Form to file your appeal. If you have additional questions or if you need assistance, you may contact our office at (541) 388-6508. If you miss the above deadline, or you disagree with a prior year's value, you may file an appeal with the Magistrate Division of the Oregon Tax Court. Appeal forms may be obtained by calling Oregon Tax Court, Magistrate Division, 503-986-5650 or on the web at Oregon Tax Court.

CERTAIN STANDARDS MUST BE MET TO HAVE APPEALS TO THE MAGISTRATE HEARD. All appeal forms are available in the Assessor's Office.

Property Tax Exemptions
http://egov.oregon.gov/DOR/PTD/exemptions.shtml

Exemptions are defined as property that has been removed from the assessment roll, thus excluded from taxation. There are approximately 62 different exemptions and/or special assessments that qualifying property owners and lessees can apply for.

There are three types of exemption: full exemption, partial exemption, and special assessment. The portion of the property that's use qualifies for the exemption determines whether a full or partial exemption is granted. Specially assessed properties are valued using an assessment technique that results in a lower taxable value than would be the case if the usual assessment practice were used. This, in effect, results in a partial exemption.

The bulk of exemptions fall into the special organization category. The most common qualifying entities are religious, fraternal, literary, benevolent, or charitable. Property for which this type exemption is requested must be actively occupied and used by the organization in a way that furthers its stated purpose. The property must also be reasonably necessary. Any portion of a property that does not meet these criteria is subject to assessment and taxation the same as all other taxable property.

Types of special assessments include but are not limited to historic, enterprise zone, and open space.

For more information on Real and Property Tax Exemptions:

·         Disabled War Veteran or Surviving Spouse Property Tax Exemption

·         Disabled War Veteran or Surviving Spouse Exemption Claim

·         Enterprise Zone Exemptions Forms

·         Property Tax Exemptions for Special Organizations

·         Application for Cancellation of Assessment on Commercial Facilities under Construction

·         Exemption for Property Leased by an Exempt Body to Another Exempt Body

·         Exemption for Lease or Lease Purchase Property Owned by Taxable Owner and Leased to an Exempt Public Body, Institution, or Organization

·         Exemption for Specified Institutions and Organizations

·         Oregon Active Military Service Member's Property Tax Exemption Claim

·         Food Processor Exemption Claim

·         Application for Property Tax Relief By a Nonprofit Home for the Elderly

·         Request for Computation of Payment in Lieu of Taxes

There was a great article released last Thursday indicating that signs are pointing toward the housing sector starting to heal. I thought it was worth while sending you all a link to this article.

As always, if you are looking to buy or sell real estate in Central Oregon, please let me know.

Click here to read the article.

HUD has just announced that detailed guidelines on the federal government's plan to provide short-term loans to borrowers using the First Time Homebuyer Tax Credit is expected to be out shortly but a spokesperson from the U.S. Department of Housing and Urban Development, which is writing the guidance, couldn't give a firm release date.

The short-term loan program, which would effectively monetize the first-time homebuyer tax credit by permitting eligible lenders to make bridge loans collateralized by the borrower's expected tax credit, was announced by HUD Secretary Shaun Donovan at the Real Estate Summit the National Association of Realtors® hosted on May 12 during its 2009 Midyear Legislative Meetings in Washington.

It's unclear at this point what shape the guidance will take and whether authorization for the loans will be available across the board or only in states in which the state housing finance agency already has a tax credit bridge-loan program in place.

I will keep you informed regarding the release date of the guidelines as they become available. Call me if you have any questions.

On Tuesday (May 12, 2009), the Federal Housing Administration (FHA) announced it will allow first-time homebuyers to use the federal tax credit of up to $8,000 for a down payment at closing – for FHA loans.    FHA will allow approved lenders and nonprofits, and state and local government agencies to issue short-term bridge loans buyers can use for down payments.  Buyers would repay the loans after getting their tax refunds.  This could be good news for first time home buyers, which are slated to account for 53% of home purchases in 2009 - but unfortunately, there isn't much we can do until the details of the program are fully released, and in turn accepted by lenders.   I’ll keep you posted!

Remember: FHA already allows the buyer to receive a gift for the down payment (minimum 3.5% down).  Many buyer’s are already taking advantage of this unique feature of FHA by getting a $8,000 gift with plans to repay the gift after closing and after they get the $8,000 tax credit (note: even though gifts don’t need to be repaid – a homeowner can always decide to repay the gift if they wish).

As always, if you have any questions, please don't hesitate to call. If you know of anyone looking to Buy or Sell Real Estate in Central Oregon, I would greatly appreciate your referral. Thanks.

You may not be quite ready to accept the idea that housing on a national basis has moved beyond bottoming out and is now in slow recovery mode.

But think about this: Even if you're bearish on the market, you've got to notice that some extraordinarily positive signs are popping up that point to recovery.

New mortgage applications last week for home purchases and refinancings were up 77 percent from the same week in April 2008, according to the Mortgage Bankers Association. That's a statistic that's hard to ignore!

Mortgage rates continue to average well below 5 percent -- 4.7 percent last week on average for 30-year fixed-rate loans and 4.5 percent for 15 year loans. Rates like these are a major factor pushing applications way up, no question, but sharply lower housing prices in many markets are an important part of the equation as well.

Nearly 600,000 homebuyers have already claimed either the $7,500 tax credit from last year, or the $8,000 credit for this year, according to IRS data cited by the National Association of Home Builders.

Many of these buyers are true first timers, but plenty of others are people who are now jumping back into real estate after not owning for a few years, drawn in by today's much more affordable prices and financing.

California offers a separate $10,000 tax credit for buyers of new (never occupied) homes.  These buyers do not need to be 1^st time buyers and this tax credit is helping to move excess inventory in California.

The rebound underway in mortgages is even creating a mini hiring boom! The Bank of America has just announced that it will be adding 5,000 new positions around the country -- just to deal with its red hot mortgage business, which closed nearly 400,000 new loans during the first quarter. Other big lenders are hiring loan officers and processors again too.

Hard-hit local housing markets continue to roar back with sales gains. On Florida's west coast, in the Sarasota and Bradenton areas, sales were up 28 percent in March over last year, and pending sales -- pointing to more purchases in the pipeline but not yet closed -- were up 27 percent.

Inventories of unsold houses in the Sarasota-Bradenton area are down 31 percent, to the lowest level since December 2005, according to a report from Trendgrafix.

Nationally, house prices have begun moving up again after many months of declines. According to the Federal Housing Finance Agency, prices rose by seven tenths of a percent on average last month - after falling by six and a half percent during the previous 12 months.

Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consumer credit and banking industry regulation.

If you have any questions, or if you or someone you know is looking to either Buy or Sell Real Estate in Central Oregon, please let me know. I'm here to help!

Federal, State Partners Announce Multi Agency Crackdown Targeting Foreclosure Rescue Scams, & Loan Modification Fraud:

As homeowners & communities throughout the country continue to face devastating consequences from the deep contraction in the economy & the housing market, the Obama Administration announced on 04/06/09 a new coordinated effort across federal & state government and the private sector to target mortgage loan modification fraud & foreclosure rescue scams that threaten to hurt American homeowners & prevent them from getting the help they need during these challenging times… Read the entire press release, at: http://www.hud.gov/news/release.cfm?content=pr09-033.cfm & Visit: http://www.makinghomeaffordable.gov/ , Download the new brochure at: http://www.hud.gov/offices/hsg/sfh/mha.pdf

As always, let me know if you have any questions or need any assistance. I'm here to help!!

Here’s some helpful info on the tax credit options, straight from the IRS: 

First-Time Homebuyers Have Several Options to Maximize New Tax Credit
IR-2009-27, March 18, 2009 Audio Files for Podcasts: English Spanish WASHINGTON — As part of the Treasury Department’s consumer outreach effort and with the April 15 individual tax filing deadline approaching, the Internal Revenue Service today began a concerted effort to educate taxpayers about additional options at their disposal to claim the new $8,000 first-time homebuyer credit for 2009 home purchases. For people who recently purchased a home or are considering buying in the next few months, there are several different ways that they can get this tax credit even if they’ve already filed their tax return. The Treasury Department encourages taxpayers to explore these options to maximize their credit and get their money back as fast as possible. “The new credit can get money in the pockets of first-time homebuyers quickly,” said IRS Commissioner Doug Shulman. “For people who recently purchased a home or are considering buying in the next few months, there are several different ways that they can get this tax credit even if they’ve already filed their tax return.” First-time homebuyers represent a significant portion of existing single-family home sales. The expansion in the first-time homebuyer credit will make it easier for first-time homebuyers to enter the housing market this year. Under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchase a home before Dec. 1 receive up to $8,000, or $4,000 for married individuals filing separately. People can claim the credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year. The filing options to consider are: File an extension. Taxpayers who haven’t yet filed their 2008 returns but are buying a home soon can request a six-month extension to October 15.  This step would be faster than waiting until next year to claim it on the 2009 tax return.  Even with an extension, taxpayers could still file electronically, receiving their refund in as few as 10 days with direct deposit. File now, amend later. Taxpayers due a sizable refund for their 2008 tax return but who also are considering buying a house in the next few months can file their return now and claim the credit later.  Taxpayers would file their 2008 tax forms as usual, then follow up with an amended return later this year to claim the homebuyer credit. Amend the 2008 tax return. Taxpayers buying a home in the near future who have already filed their 2008 tax return can consider filing an amended tax return. The amended tax return will allow them to claim the homebuyer credit on the 2008 return without waiting until next year to claim it on the 2009 return. Claim the credit in 2009 rather than 2008. For some taxpayers, it may make more financial sense to wait and claim the homebuyer credit next year when they file the 2009 tax return rather than claiming it now on the 2008 tax return. This could benefit taxpayers who might qualify for a higher credit on the 2009 tax return. This could include people who have less income in 2009 than 2008 because of factors such as a job loss or drop in investment income. The IRS reminds taxpayers the amount of the credit begins to phase out for taxpayers whose modified adjusted gross income is more than $75,000, or $150,000 for joint filers. Taxpayers can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately. IRS.gov provides more information, including guidance for people who bought their first homes in 2008. To learn more about the overall implementation of the Recovery Act, visit www.Recovery.gov. Subscribe to IRS Newswire

Additionally, the Fed has indicated that they will expand the Term Asset-Backed Securities Loan Facility (“TALF”).  Previously the Fed has indicated that the TALF could expand to include purchasing private MBS (Jumbos) and with today’s announcement it appears that is likely to be the case.  While we don’t see Jumbos rates dropping on the magnitude of what we saw with conforming, this is welcome news.

All positive developments!  I will forward additional information as it is available.  

As always, please don't hesitate to contact me if you or anyone you know is looking to buy or sell real estate in the Central Oregon area. I'm here to help.

The Internal Revenue Service now has available IRS Form 5405 which explains how the recently passed First Time Home Buyer Tax Credit actually works. You can access this information here.

I hope the information helps explain this new program in more detail. Business is definetly picking up as we get closer to Spring. If you have any questions or need any immediate assistance, please don't hesitate to contact me.