First Time Home Buyer Federal Tax Credit Extended…and Expanded

The government has extended the first-time home buyer federal tax credit as well as expanded to include many existing home owners. First-time home buyers now have until April 30, 2010 to sign a contract and qualify for a tax credit up to $8,000. And starting November 7, many existing home owners may qualify for a tax credit of up to $6,500.

For more information, check out this flyer provided by the Virginia Association of REALTORS(R):

Information on extended and expanded first time home buyer federal tax credit -

You can also get more information on the extended first-time home buyer tax credit by clicking here.

How The First-Time Home Buyer Federal Tax Credit Works

Bob and Sally show us how the first-time home buyer federal tax credit works (click here if you can’t see the video below)…

Hat tip to NRVLiving.com and NVAR.com

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Time’s a Tickin’ On the First-Time Home Buyer Federal Tax Credit

Time’s a Tickin’ on the First-Time Home Buyer Federal Tax Credit

If you would like to take advantage of the first-time home buyer Federal tax credit, you’ll need to act soon because time is running out. The tax credit expires December 1, 2009, which means that you have to settle on your new home no later than November 30, 2009.

What does this mean practically speaking?

Despite November 30 being the deadline, you should aim to settle by November 15th to help leave room for any delays on your or the sellers’ end. Also, settlement companies will be swamped with settlements the last two weeks of November and may be delayed themselves. And don’t forget that the Thanksgiving holiday takes away at least one, if not two business days at the end of November.

At this point, short-sales are pretty much out of the picture as far as settling in time to take advantage of the first-time home buyer federal tax credit. It takes an average of 90 days to get a response from a bank(s) on short-sale approval and then you will need another 3 to 4 weeks after that to settle. This puts you way past the November 30 deadline.

If you are a home buyer going after a traditional resale or foreclosure, you should ratify a contract no later than about October 1 to 15 depending on the type of financing (conventional vs FHA vs VA). Conventional financing takes about 30 days from date of ratification to process and fun. FHA financing takes 30 to 45 days. VA financing takes closer to 45 days. (These are general numbers - the lenders I work with closely are awesome and get everything done within 30 days no matter what type of financing you go with)

If you are a home buyer who wants to take advantage of the first-time home buyer federal tax credit, you need to start actively searching for a property to purchase immediately. This will give you about a month to search for a property, submit and ratify an offer with enough time to settle before the deadline.

Wondering how to get started in home buying process?

First - click here to read my post, “The Home Buying Timeline”

Second - Click here to contact me so we can chat more about your specific situation and see what’s best for you.

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“Move fast to take advantage of first-time homebuyer federal tax credit” - Washington, DC Examiner

Information on first-time home buyer federal tax credit from the Internal Revenue Service (IRS)

When Does the $8000 First Time Home Buyer Credit Expire?

You’ve probably heard about the $8000 first time home buyer credit (click here if you haven’t or would like more information about it). But do you know exactly how long you have before it expires?

IMPORTANT: This is how long you have until it expires, but you must settle/close on the purchase of your home by this date. That means you should be starting your home search in the near future especially if you’re considering purchasing a short-sale property (click here to find out how much time each type of transaction takes to close).

H/T to Ken Brand for sharing about the widget

HUD Approves First Time Homebuyers, Lenders Using Tax Credit as Down Payment

Looks like I spoke too soon… HUD has approved first time home buyers and lenders (mortgagees) using the up-to-$8000 first time home buyer tax credit as a down payment, to pay closing costs and/or buy down the interest rate. The official HUD letter with guidelines was released yesterday. Here it is (if you can’t see the document, click here)…

HUD Letter to Mortgagees: Instructions on how to use First Time Home Buyer Tax Credit -

The next step is for banks/lenders to come up with a system internally that will allow them to offer this to borrowers. This could take a few days to a several weeks. Check with your lender to see if/when they have a system in place for you to take advantage of this program.

P.S. This “use your tax credit as a down payment” program is set to expire this November. The up-to-$8000 first time home buyer tax credit as a whole is set to expire December 1, 2009.

Hat tip to Dulles Association of Realtors (DAAR) for breaking the story.

What’s Up With the $8K Homebuyer Tax Credit Being “Monetized”?

On May13, HUD Secretary Shaun Donovan said that the Federal Housing Administration (FHA) is going to permit its lenders to allow first time home buyers to use the $8000 tax credit as a down payment (aka “monetize” the tax credit).

The next day, May 14, the Office of Management & Budget told the FHA to hold off on implementing the program because it was only a “proposal” (aka “sike!”).

Since then, consumers, agents, lenders and others have been waiting (impatiently) for a final and real answer to if/when the first time home buyer tax credit will be “monetized”.

Well, here’s the latest. According to an article in the Wall Street Journal,

“The FHA says that the rumors about the program’s demise were flat-out wrong and that the program will be rolled out soon. Some industry analysts say that the memo may have been pulled because the program, which uses a tax credit established in February’s stimulus package, needed an OK from the White House budget office.”

If the program is approved, it would only be available through November of this year so time is a ticking…

I’ll keep you posted as more becomes available.