Blogging From The Desk of Alicia Lagarde-Craig
This Month in Real Estate
December 2009
Commentary
Small steps to economic recovery continued last month. Among the positive readings was the report of a third quarter GDP growth rate of 2.8 percent, which followed four consecutive quarterly declines. This advance comes in well ahead of that of our Canadian neighbors, whose economy was once anticipated to be the first country out of recession, and by significant margin. Canada posted marginal 0.4 percent growth. Unemployment fell in November for the first time since April 2008. A strong rebound in home sales activity from year ago levels also points to a firmer stabilization.
With the extension of the $8,000 federal housing tax credit into spring 2010, first-time buyers will now have an additional few months to purchase their dream homes. Expansion of the income restrictions now gives possibilities for higher earners to participate too. And the $6,500 tax credit now available to established homeowners with five consecutive years or more in their homes broadens the opportunity landscape. This in turn will allow the housing market more time to find a more solid footing on a sustainable recovery.
Although economists continue to debate the overall shape of the recovery, it is widely agreed that the U.S. economy will take a long time to rebound. Unemployment is expected to remain high for several quarters and the number of underemployed is expected by some economists to remain a drag on growth prospects. On the brighter side, according to some economists, a slow and steady growth will likely fair better for the long-term well-being of the economy. Slower, sustained growth can help prevent dangerous asset bubbles, like the recent housing and technology bubbles, from growing and bursting.
The Housing Market
Existing Home Sales - Up 24% from last year
Existing home sales recorded another strong gain in October with many buyers rushing to beat the deadline for the first-time buyer tax credit scheduled to expire at the end of November. Sales surged 10.1 percent to 6.1 million units over September sales of 5.54 million and are 23.5 percent above the 4.94 million-unit level seen last year. Sales activity is at the highest level since February 2007 when it reached 6.55 million.
Median Home Price - Very favorable
Low home prices are contributing to extremely favorable affordability conditions. Existing-home price was $173,100 in October, 5 percent higher from its low in January but still 7.1 percent below October 2008. Distressed properties, which accounted for 30 percent of all transactions in October, continue to hold down the median home price, as they typically sell for 15 to 20 percent less than traditional homes.
Inventory - Lowest level in more than 2.5 years
"We are getting closer to a general balance between buyers and sellers,” according to Lawrence Yun, NAR chief economist. The supply of homes is now at the lowest level in more than two and a half years. Total housing inventory at the end of October fell 3.7 percent to 3.57 million existing homes available for sale, representing a seven-month supply at the current sales pace, down from September’s eight-month supply. Compared to a year ago, there are now 15 percent fewer homes on the market.
Mortgage Rates – Back at 4.78%
Remaining at attractive levels for people looking to buy a home or refinance, historically low interest rates are boosting the market. Rates for 30-year fixed loans fell to 4.95 percent in October from 5.06 percent the month before. During the week ended November 25, rates again dropped to the low 4.78 percent reached in the spring. As the economy enters its recovery phase and concerns over inflation come back, mortgage rates are expected to go up.
Affordability – Best since 1970s
Unprecedented interest rates, low home prices, as well as the first-time buyer tax credit are lifting the housing market. All these factors combined are “adding to the buying power of the typical family, with affordability conditions this year at the highest on record dating back to 1970,” according to Lawrence Yun, NAR chief economist. So far this year, the home price-to-income ratio has fallen well below the historical average of 25 percent. The ratio now stands at 15 percent.
Sources: National Association of Realtors, Freddie Mac
Government Action
New Fannie Mae Policies
"First Look"
In many markets dominated by distressed properties, buyers jumped off the fence in droves and as a result the number of homes for sale in the first tier of the market decreased significantly. When a new foreclosure becomes available for sale, it often is snapped up by investors with cash on hand, leaving the average home buyer looking for a place to live out of luck.
Fannie Mae introduced a new “First Look” initiative to address this and aid in the stabilization of neighborhoods.
During the first 15 days a Fannie Mae REO is on the market, only buyers who will live in the home and public entities committed to the best interests of the community may purchase it.
Buyers will have 45 days to close, up from 30 days.
Earnest money requirement may be reduced.
This will hopefully give the average home buyer a greater chance of purchasing foreclosures and provide support to hard-hit neighborhoods, because owner-occupants are more invested in the long-term vitality of a community whereas investors typically are more invested in their monetary return from the property.
Increased Credit Scores
Fannie Mae is raising its minimum credit score from 580 to 620. This risk management measure will help protect Fannie Mae from future defaults and foreclosure by raising their standard and accepting less risky loans.
While risk management is a sound and healthy approach for an entity that the economy depends on, this underscores the importance that potential home buyers check their credit report early in the process, allowing more time to clear up any errors.
Earlier this year, Experian, one of three major credit-reporting bureaus, began exclusively providing complete credit report information when purchased directly from Experian or obtained from the government annual credit report.
Source: National Association of Realtors
FHA Signals Efforts to Manage Risk
In an effort to secure its financial health, the Federal Housing Administration plans to require borrowers to have more “skin in the game” soon. Over the past three years, FHA’s market share has boomed from about 2 percent of all new loans to about 30 percent of all new loans this year and 20 percent of refinances. The escalading volume that the administration is currently handling calls for stricter requirements as evidenced by FHA’s capital ratios falling to nearly 0.5 percent well below the minimum of 2 percent.
The agency is still analyzing the levels and time frames it wishes to tighten its standards but they expect to:
Increase minimum down payments
Increase minimum credit scores
Increase insurance premiums
Lower the amount of seller concessions
As one of the major players in the mortgage market, the health of FHA is imperative to the housing market and flow of credit to home buyers, as well as to the health of the overall economy. Taking measures to safeguard the agency from needing a government tax payer-funded bailout is a notable risk management measure.
According to a Keller Williams research study, the typical first-time buyer put down 3.5 percent this year. Those who want to take advantage of the tax credit before the April 30 contract, June 30 closing deadline may want to beef up their savings and check their credit report now in anticipation of any changes.
Sources: National Association of Realtors, KW Research First Time Home Buyer Survey
Topics For Buyers & Sellers
First Time & Distressed Property Home Buyers
What are other first time buyers doing?
The tax credit extension and expansion in November has fueled new discussion about home buyers and the housing market in 2010. Here’s a look at first-time buyers in 2009.
The median age is 28, significantly down from where it was in 2005 at 32.
Location or Neighborhood was the No. 1 “must-have” for 36% of buyers.
2 out of 3 sellers paid at least part of the buyer’s closing costs.
76% used their own savings for the down payment.
1 in 4 had help from their family for the down payment.
As elevated levels of distressed properties are expected to continue for the next few years, here is a glimpse of buying a distressed property:
27% of foreclosures* were purchased by investors.
47% of distressed* properties were purchased by first-time buyers.
89% of those first time buyers that purchased a distressed property were motivated by the $8,000 tax credit.
7 in 10 agents have seen an increase in multiple offers.
Approximately 3 out of 5 agents discuss the differences between buying distressed and traditional properties at the buyer consultation.
* Distressed – Short Sale and REO, Foreclosure – REO Only
Contact Alicia & Jeff,
your local real estate experts,
for information about what's going on in our area.
Newsletter Contents
1. Commentary
2. The Housing Market
3. Government Action
4. Topics for Buyers
and Sellers
Monday, December 14, 2009
Monday, November 30, 2009
First Time Homebuyer Tax Credit Information- Updated!
Blogging From The Desk of Alicia Lagarde-Craig
A new law that went into effect Nov. 6 extends the first-time homebuyer credit five months and expands the eligibility requirements for purchasers. The Worker, Homeownership, and Business Assistance Act of 2009 extends the deadline for qualifying home purchases from Nov. 30, 2009, to April 30, 2010. Additionally, if a buyer enters into a binding contract by April 30, 2010, the buyer has until June 30, 2010, to settle on the purchase. The maximum credit amount remains at $8,000 for a first-time homebuyer ; that is, a buyer who has not owned a primary residence during the three years up to the date of purchase. But the new law also provides a long-time resident credit of up to $6,500 to others who do not qualify as first-time homebuyers. To qualify this way, a buyer must have owned and used the same home as a principal or primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of a new home as a primary residence. For all qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 tax returns. A new version of Form 5405, First-Time Homebuyer Credit, will be available in the next few weeks. A taxpayer who purchases a home after Nov. 6 must use this new version of the form to claim the credit. Likewise, taxpayers claiming the credit on their 2009 returns, no matter when the house was purchased, must also use the new version of Form 5405. Taxpayers who claim the credit on their 2009 tax return will not be able to file electronically but instead will need to file a paper return. A taxpayer who purchased a home on or before Nov. 6 and chooses to claim the credit on an original or amended 2008 return may continue to use the current version of Form 5405.
Income Limits Rise the new law raises the income limits for people who purchase homes after Nov. 6. The full credit will be available to taxpayers with modified adjusted gross incomes (MAGI) up to $125,000, or $225,000 for joint filers. Those with MAGI between $125,000 and $145,000, or $225,000 and $245,000 for joint filers, are eligible for a reduced credit. Those with higher incomes do not qualify. For homes purchased prior to Nov. 7, 2009, existing MAGI limits remain in place. The full credit is available to taxpayers with MAGI up to $75,000, or $150,000 for joint filers. Those with MAGI between $75,000 and $95,000, or $150,000 and $170,000 for joint filers, are eligible for a reduced credit. Those with higher incomes do not qualify. New Requirements Several new restrictions on purchases that occur after Nov. 6 go into effect with the new law: · Dependents are not eligible to claim the credit. No credit is available if the purchase price of a home is more than $800,000. A purchaser must be at least 18 years of age on the date of purchase. For Members of the Military Members of the Armed Forces and certain federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and still qualify for the credit. An eligible taxpayer must buy or enter into a binding contract to buy a home by April 30, 2011, and settle on the purchase by June 30, 2011. For more details on the credit, email me at AliciaLagarde@kw.com or you can call 504-382-3724.
A new law that went into effect Nov. 6 extends the first-time homebuyer credit five months and expands the eligibility requirements for purchasers. The Worker, Homeownership, and Business Assistance Act of 2009 extends the deadline for qualifying home purchases from Nov. 30, 2009, to April 30, 2010. Additionally, if a buyer enters into a binding contract by April 30, 2010, the buyer has until June 30, 2010, to settle on the purchase. The maximum credit amount remains at $8,000 for a first-time homebuyer ; that is, a buyer who has not owned a primary residence during the three years up to the date of purchase. But the new law also provides a long-time resident credit of up to $6,500 to others who do not qualify as first-time homebuyers. To qualify this way, a buyer must have owned and used the same home as a principal or primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of a new home as a primary residence. For all qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 tax returns. A new version of Form 5405, First-Time Homebuyer Credit, will be available in the next few weeks. A taxpayer who purchases a home after Nov. 6 must use this new version of the form to claim the credit. Likewise, taxpayers claiming the credit on their 2009 returns, no matter when the house was purchased, must also use the new version of Form 5405. Taxpayers who claim the credit on their 2009 tax return will not be able to file electronically but instead will need to file a paper return. A taxpayer who purchased a home on or before Nov. 6 and chooses to claim the credit on an original or amended 2008 return may continue to use the current version of Form 5405.
Income Limits Rise the new law raises the income limits for people who purchase homes after Nov. 6. The full credit will be available to taxpayers with modified adjusted gross incomes (MAGI) up to $125,000, or $225,000 for joint filers. Those with MAGI between $125,000 and $145,000, or $225,000 and $245,000 for joint filers, are eligible for a reduced credit. Those with higher incomes do not qualify. For homes purchased prior to Nov. 7, 2009, existing MAGI limits remain in place. The full credit is available to taxpayers with MAGI up to $75,000, or $150,000 for joint filers. Those with MAGI between $75,000 and $95,000, or $150,000 and $170,000 for joint filers, are eligible for a reduced credit. Those with higher incomes do not qualify. New Requirements Several new restrictions on purchases that occur after Nov. 6 go into effect with the new law: · Dependents are not eligible to claim the credit. No credit is available if the purchase price of a home is more than $800,000. A purchaser must be at least 18 years of age on the date of purchase. For Members of the Military Members of the Armed Forces and certain federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and still qualify for the credit. An eligible taxpayer must buy or enter into a binding contract to buy a home by April 30, 2011, and settle on the purchase by June 30, 2011. For more details on the credit, email me at AliciaLagarde@kw.com or you can call 504-382-3724.
Tuesday, November 3, 2009
Homebuyer Tax Credit Closer to Extension
Blogging From The Desk of Alicia Lagarde-Craig
Homebuyer Tax Credit Closer to Extension
November 3rd, 2009
The $8,000 federal tax credit for first-time homebuyers that is set to expire at the end of the month inched another step closer to getting extended until April. The Senate voted 85-2 yesterday to move the bill to a final vote, and senior members of Congress said that they expected the bill to pass next week.
In what officials say is a move to stimulate the economy, the measure might even be expanded to give a $6,500 tax credit to homebuyers who have lived in their previous home for at least 5 years.
Prolonging the tax credit is sure to be welcomed by home builders like Toll Brothers and KB Homes, as well as financial institutions like U.S. Bank, whose mortgage-revenue rose nearly 5% last quarter.
The vote comes only weeks after tax officials testified that they received 90,000 bogus claims for the $8,000 credit. Some 1.4 million legitimate claims have been filed, totaling approximately $18 billion in tax credits.
Homebuyer Tax Credit Closer to Extension
November 3rd, 2009
The $8,000 federal tax credit for first-time homebuyers that is set to expire at the end of the month inched another step closer to getting extended until April. The Senate voted 85-2 yesterday to move the bill to a final vote, and senior members of Congress said that they expected the bill to pass next week.
In what officials say is a move to stimulate the economy, the measure might even be expanded to give a $6,500 tax credit to homebuyers who have lived in their previous home for at least 5 years.
Prolonging the tax credit is sure to be welcomed by home builders like Toll Brothers and KB Homes, as well as financial institutions like U.S. Bank, whose mortgage-revenue rose nearly 5% last quarter.
The vote comes only weeks after tax officials testified that they received 90,000 bogus claims for the $8,000 credit. Some 1.4 million legitimate claims have been filed, totaling approximately $18 billion in tax credits.
Wednesday, October 28, 2009
Status of Tax Credit
Blogging From The Desk of Alicia Lagarde-Craig
Status of Tax Credit: Getting Closer
While a final deal was not reached, there were encouraging signs that a deal is very likely. It is more a question of “when” than “if”.
The proposed deal (which is still subject to change) would extend the tax credit until April 30,2010 and also expand it to “move up” borrowers.
Details of the revised homebuyer credit reportedly are as follows:
• Credit is changed to 10% of sales price up to $7290
• For first time homebuyers, the income level to qualify is $ 75,000/150,000.
• For “move up” buyers the income level to qualify is $ 125,000/250,000.
• For “move up” buyers, they must have been residing in their primary residence for 5 years.
• The credit runs from Dec. 1, 2009 to April 30, 2010.
Sales contracts signed as of April 30, 2010 would have 60 days to close.
Status of Tax Credit: Getting Closer
While a final deal was not reached, there were encouraging signs that a deal is very likely. It is more a question of “when” than “if”.
The proposed deal (which is still subject to change) would extend the tax credit until April 30,2010 and also expand it to “move up” borrowers.
Details of the revised homebuyer credit reportedly are as follows:
• Credit is changed to 10% of sales price up to $7290
• For first time homebuyers, the income level to qualify is $ 75,000/150,000.
• For “move up” buyers the income level to qualify is $ 125,000/250,000.
• For “move up” buyers, they must have been residing in their primary residence for 5 years.
• The credit runs from Dec. 1, 2009 to April 30, 2010.
Sales contracts signed as of April 30, 2010 would have 60 days to close.
Wednesday, September 30, 2009
First-Time Homebuyer Seminar plus Information on the 2009 Tax Credit
Blogging from the desk of Alicia Lagarde Craig:
Take advantage of our FREE Seminar & Learn all about the following:
- Home Ownership Benefits
- The Role of the Real Estate Agent
- Credit Criteria
- How the Credit Scoring System Works
- The Role of the Mortgage Professional
- How to take advantage of the 2009 Tax Credit and receive up to $8000 in FREE money!
Place:
Keller Williams Realty New Orleans
8601 Leake Avenue
New Orleans, LA 70118
Date:
Tuesday, October 6th, 2009
Time:
6pm-7:30pm
Presented by:
Alicia Lagarde Craig & Jeff Craig in affiliation with Keller Williams Realty New Orleans
Please RSVP to: alicialagarde@kw.com or jeffcraig@kw.com
If you have any questions, please call 504-862-4139.
We look forward to seeing you there!!!
Take advantage of our FREE Seminar & Learn all about the following:
- Home Ownership Benefits
- The Role of the Real Estate Agent
- Credit Criteria
- How the Credit Scoring System Works
- The Role of the Mortgage Professional
- How to take advantage of the 2009 Tax Credit and receive up to $8000 in FREE money!
Place:
Keller Williams Realty New Orleans
8601 Leake Avenue
New Orleans, LA 70118
Date:
Tuesday, October 6th, 2009
Time:
6pm-7:30pm
Presented by:
Alicia Lagarde Craig & Jeff Craig in affiliation with Keller Williams Realty New Orleans
Please RSVP to: alicialagarde@kw.com or jeffcraig@kw.com
If you have any questions, please call 504-862-4139.
We look forward to seeing you there!!!
Friday, September 4, 2009
State Finance Program to Provide $25 Million for HomeBuyers
Blogging From The Desk of Alicia Lagarde-Craig
*HOT OFF THE PRESS*
Louisiana Housing Finance Agency offers a number of opportunities for low and moderate income Louisiana families to realize their dreams of owning a home through its First-Time Homebuyer Program. The LHFA expects the money to be tapped quickly. The program is only likely to benefit approximately 200 homeowners statewide with a variety of tools for down payments, closing costs and mortgage rate assistance.
The program offers a variety of 30-year, fixed-rate mortgages, some at below market interest rates to potential homebuyers. LHFA's current 2009A Program offers a four-tiered interest rate structure:
The HOME Mortgage Revenue Bond Program
HOME/MRB Program Loans:
The HOME/MRB Program will bear interest at 4.10%. Assistance Payments equal to 4.50%to 9% of the Mortgage Loan amount will be paid at closing to cover part of the down payment, closing costs, and prepaid items. For HOME/MRB borrowers, up to 2% of the interest rate each month on a HOME Assisted Program Loan may be deposited into an escrow fund and transferred to an eligible borrower obtaining a HOME Assisted Program loan in order to provide assistance to such eligible borrower for prepaying insurance premium payments. Lenders are required to complete the “Escrow Subsidy Agreement Exhibit “Q” for borrowers receiving this subsidy. The Escrow Subsidy Agreement will be transmitted to lenders upon approval of loans.
The Community Block Development Grant Program
CDBG/MRB Program Loans:
The CDBG/MRB Program will bear interest at 4.11%. Assistance payments equal to 4.50% to 9% of the Mortgage Loan amount will be paid at closing to cover part of the down payment, closing costs, and prepaid items. Properties are limited to 11 parishes and must be 1 family or 2 family homes. The 11 parishes are as follows: Acadia, Calcasieu, Cameron, Iberia, Jefferson, Plaquemines, St. Tammany, Tangipahoa, Terrebonne, Vermilion and Washington Parishes. All applicants must be first-time homebuyers and must agree to use the home as their primary residence for at least 3 years.
The Assisted Program
Assisted Program Loans:
The interest rate for the Assisted Program will bear interest at 6.10%. Assistance payments equal to 4% of the Mortgage Loan amount will be paid at closing to cover part of the down payment, closing costs, and prepaid items.
The Low Rate Homebuyer Tax Credit Program
The Low Rate Homebuyer Tax Credit Program Loans:
Low Rate - Homebuyer Tax Credit Program will bear an interest rate at 5.60%. This program will advance up to $5,000 per loan for down payment, closing costs, and prepaid items. The borrower must qualify for the $8,000 First-Time Homebuyer Tax Credit. There will be a second mortgage executed with this program and must close on or before 11/30/09. After the initial deferral period through 6/30/10, the loan will fully amortize over ten years, starting with payments 8/1/10, with an interest rate of 7.60% unless the Agency is repaid in full with the borrowers federal tax refund. The second morgage loan payment must be included in the Debt to Income Ratio. This program will require a $100 Application Fee in addition to the $75 Compliance Fee. A Homebuyer Tax Credit Program Disclosure is required detailing the information on the terms of the loan, the tax credit, and the option to repay LHFA through the federal tax credit.
American Dream Downpayment Initiative (ADDI):
Louisiana Housing Finance Agency (the “Agency”) has implemented a homeownership initiative in partnership with its participating lenders to expand homeownership opportunities for low-income households throughout the State of Louisiana.
The ADDI program will provide grants up to 6% of the sales price or $10,000, whichever is greater, in connection with the lender’s first mortgage loan.
Eligibility
2009A Bond Issue allows for the following:
The first-time homebuyer rules are waived for the Assisted Program loans ONLY in all 64 parishes located in the State of Louisiana.
The purchase price and income limits are elevated to targeted area limits for the Assisted and Low Rate - Homebuyer Tax Credit Programs ONLY in all 64 parishes located in the State of Louisiana.
Visit the website viewing Exhibit F1 for Standard MRB Maximum Permissible Acquisition Cost & F2 for HOME/MRB Maximum Permissible Acquisition Cost AND
Visit the website viewing Exhibit G 2009 HOME/MRB Income Limits, 2009 MRB Income Limits, and CDBG/MRB Income Limits
For HOME/MRB and CDBG Program Loans use the HOME/MRB Income and Purchase Price limits.
The prospective homeowner must also meet income and purchase price limits. Income limits vary with the number of persons in the household and by parish. Purchase price limits vary according to the number of units in the property and if it is located in a targeted or non-targeted area. Also, the homebuyer must use the house as his/her principal place of residence.
If you are interested in owning your home, please contact Alicia Lagarde-Craig @ 504-382-3724 or you can email me at AliciaLagarde@kw.com.
~Alicia Lagarde-Craig September 4, 2009
*HOT OFF THE PRESS*
Louisiana Housing Finance Agency offers a number of opportunities for low and moderate income Louisiana families to realize their dreams of owning a home through its First-Time Homebuyer Program. The LHFA expects the money to be tapped quickly. The program is only likely to benefit approximately 200 homeowners statewide with a variety of tools for down payments, closing costs and mortgage rate assistance.
The program offers a variety of 30-year, fixed-rate mortgages, some at below market interest rates to potential homebuyers. LHFA's current 2009A Program offers a four-tiered interest rate structure:
The HOME Mortgage Revenue Bond Program
HOME/MRB Program Loans:
The HOME/MRB Program will bear interest at 4.10%. Assistance Payments equal to 4.50%to 9% of the Mortgage Loan amount will be paid at closing to cover part of the down payment, closing costs, and prepaid items. For HOME/MRB borrowers, up to 2% of the interest rate each month on a HOME Assisted Program Loan may be deposited into an escrow fund and transferred to an eligible borrower obtaining a HOME Assisted Program loan in order to provide assistance to such eligible borrower for prepaying insurance premium payments. Lenders are required to complete the “Escrow Subsidy Agreement Exhibit “Q” for borrowers receiving this subsidy. The Escrow Subsidy Agreement will be transmitted to lenders upon approval of loans.
The Community Block Development Grant Program
CDBG/MRB Program Loans:
The CDBG/MRB Program will bear interest at 4.11%. Assistance payments equal to 4.50% to 9% of the Mortgage Loan amount will be paid at closing to cover part of the down payment, closing costs, and prepaid items. Properties are limited to 11 parishes and must be 1 family or 2 family homes. The 11 parishes are as follows: Acadia, Calcasieu, Cameron, Iberia, Jefferson, Plaquemines, St. Tammany, Tangipahoa, Terrebonne, Vermilion and Washington Parishes. All applicants must be first-time homebuyers and must agree to use the home as their primary residence for at least 3 years.
The Assisted Program
Assisted Program Loans:
The interest rate for the Assisted Program will bear interest at 6.10%. Assistance payments equal to 4% of the Mortgage Loan amount will be paid at closing to cover part of the down payment, closing costs, and prepaid items.
The Low Rate Homebuyer Tax Credit Program
The Low Rate Homebuyer Tax Credit Program Loans:
Low Rate - Homebuyer Tax Credit Program will bear an interest rate at 5.60%. This program will advance up to $5,000 per loan for down payment, closing costs, and prepaid items. The borrower must qualify for the $8,000 First-Time Homebuyer Tax Credit. There will be a second mortgage executed with this program and must close on or before 11/30/09. After the initial deferral period through 6/30/10, the loan will fully amortize over ten years, starting with payments 8/1/10, with an interest rate of 7.60% unless the Agency is repaid in full with the borrowers federal tax refund. The second morgage loan payment must be included in the Debt to Income Ratio. This program will require a $100 Application Fee in addition to the $75 Compliance Fee. A Homebuyer Tax Credit Program Disclosure is required detailing the information on the terms of the loan, the tax credit, and the option to repay LHFA through the federal tax credit.
American Dream Downpayment Initiative (ADDI):
Louisiana Housing Finance Agency (the “Agency”) has implemented a homeownership initiative in partnership with its participating lenders to expand homeownership opportunities for low-income households throughout the State of Louisiana.
The ADDI program will provide grants up to 6% of the sales price or $10,000, whichever is greater, in connection with the lender’s first mortgage loan.
Eligibility
2009A Bond Issue allows for the following:
The first-time homebuyer rules are waived for the Assisted Program loans ONLY in all 64 parishes located in the State of Louisiana.
The purchase price and income limits are elevated to targeted area limits for the Assisted and Low Rate - Homebuyer Tax Credit Programs ONLY in all 64 parishes located in the State of Louisiana.
Visit the website viewing Exhibit F1 for Standard MRB Maximum Permissible Acquisition Cost & F2 for HOME/MRB Maximum Permissible Acquisition Cost AND
Visit the website viewing Exhibit G 2009 HOME/MRB Income Limits, 2009 MRB Income Limits, and CDBG/MRB Income Limits
For HOME/MRB and CDBG Program Loans use the HOME/MRB Income and Purchase Price limits.
The prospective homeowner must also meet income and purchase price limits. Income limits vary with the number of persons in the household and by parish. Purchase price limits vary according to the number of units in the property and if it is located in a targeted or non-targeted area. Also, the homebuyer must use the house as his/her principal place of residence.
If you are interested in owning your home, please contact Alicia Lagarde-Craig @ 504-382-3724 or you can email me at AliciaLagarde@kw.com.
~Alicia Lagarde-Craig September 4, 2009
Thursday, August 13, 2009
First Time Homebuyers $8000 Tax Credit
Blogging From The Desk of Alicia Lagarde-Craig
We’ve been hearing a lot of questions about the new tax credit. Who qualifies? How does it work? How long will it last? We’re going to take an in-depth look at the $8,000 tax credit for first time home buyers.
According to the new legislation, a first time home buyer is defined as someone who has not owned a principle residence in the past three years. Those three years are counted up to the date you take possession of the house you buy in 2009. This means that even if you’ve owned a home in the past, you can still take advantage of the tax credit as long as you haven’t purchased a primary residence since (August) 2006.
The same goes for married tax payers – they must both be first time home buyers. For non-married joint buyers, only one of them needs to be a first time home buyer, or someone who hasn’t owned a primary residence in the past three years.
Qualifying homes include:
* New homes
* Homes that are being re-sold
* Condos
* Townhomes
The main restriction is that the credit is only for those who buy a home as their primary residence. So investors looking to buy a rental property would not qualify for the credit. However owning a vacation home or a rental property already does not necessarily disqualify you from taking advantage of the credit (as long as you haven’t owned a primary residence in the past three years).
A Look at the Numbers
The tax credit is equal to 10% of the purchase price of the home, up to $8,000. The amount of the credit you can qualify for is related to how much money you earn. Here’s how the credit is scaled:
* Single home buyers earning 95K or less qualify. If you make 75K or less, you qualify for 100% of the $8000. If you make halfway, 85K, you qualify for 50% or $4000. The credit phases out gradually between 75K and 95K of income. For example, if you make halfway between the income limits, 85K, you qualify for up to half of the credit.
* The same rate applies for married couples and joint buyers whose incomes limits are doubled to $150,000 to $170,000. Married couples or joint buyers whose incomes are less would receive the full $8000 credit. At an income level of $160,000, halfway between 150 and 170, the buyers would receive half the credit – or $4,000. And the credit phases out altogether at $170,000.
This credit represent a significant amount of money. One of the biggest points of difference for the new credit from the one congress passed in July of 2008, is that the new credit does not have to be paid back.
In addition, it’s refundable, which means that if you’ve paid all your taxes as you go with an automatic payroll deduction, you would receive an $8,000 check from the IRS.
If you’re committed to buying a house in 2009 and want to use the $8000 tax credit for a down payment, consult with your REALTOR and/or Certified Public Accountant.
In Closing
Qualifying home buyers will need to make their home purchase between January 1, 2009 and December 1, 2009. And the home has to remain their principal residence for the following three years.
The new tax credit coupled with historically low mortgage rates and rising affordability, offers buyers a great opportunity if they act fast.
08/13/2009. Agent is licensed in the State of Louisiana, USA.
We’ve been hearing a lot of questions about the new tax credit. Who qualifies? How does it work? How long will it last? We’re going to take an in-depth look at the $8,000 tax credit for first time home buyers.
According to the new legislation, a first time home buyer is defined as someone who has not owned a principle residence in the past three years. Those three years are counted up to the date you take possession of the house you buy in 2009. This means that even if you’ve owned a home in the past, you can still take advantage of the tax credit as long as you haven’t purchased a primary residence since (August) 2006.
The same goes for married tax payers – they must both be first time home buyers. For non-married joint buyers, only one of them needs to be a first time home buyer, or someone who hasn’t owned a primary residence in the past three years.
Qualifying homes include:
* New homes
* Homes that are being re-sold
* Condos
* Townhomes
The main restriction is that the credit is only for those who buy a home as their primary residence. So investors looking to buy a rental property would not qualify for the credit. However owning a vacation home or a rental property already does not necessarily disqualify you from taking advantage of the credit (as long as you haven’t owned a primary residence in the past three years).
A Look at the Numbers
The tax credit is equal to 10% of the purchase price of the home, up to $8,000. The amount of the credit you can qualify for is related to how much money you earn. Here’s how the credit is scaled:
* Single home buyers earning 95K or less qualify. If you make 75K or less, you qualify for 100% of the $8000. If you make halfway, 85K, you qualify for 50% or $4000. The credit phases out gradually between 75K and 95K of income. For example, if you make halfway between the income limits, 85K, you qualify for up to half of the credit.
* The same rate applies for married couples and joint buyers whose incomes limits are doubled to $150,000 to $170,000. Married couples or joint buyers whose incomes are less would receive the full $8000 credit. At an income level of $160,000, halfway between 150 and 170, the buyers would receive half the credit – or $4,000. And the credit phases out altogether at $170,000.
This credit represent a significant amount of money. One of the biggest points of difference for the new credit from the one congress passed in July of 2008, is that the new credit does not have to be paid back.
In addition, it’s refundable, which means that if you’ve paid all your taxes as you go with an automatic payroll deduction, you would receive an $8,000 check from the IRS.
If you’re committed to buying a house in 2009 and want to use the $8000 tax credit for a down payment, consult with your REALTOR and/or Certified Public Accountant.
In Closing
Qualifying home buyers will need to make their home purchase between January 1, 2009 and December 1, 2009. And the home has to remain their principal residence for the following three years.
The new tax credit coupled with historically low mortgage rates and rising affordability, offers buyers a great opportunity if they act fast.
08/13/2009. Agent is licensed in the State of Louisiana, USA.
Thursday, June 25, 2009
The FEDS Update on the Real Estate Industry
Blogging From The Desk of Alicia Lagarde-Craig
The Fed Meeting was in line with market expectations with no real surprises yesterday.
Highlights:
-Key interest rates will remain at current levels with no indication of immediate increases
-The Fed deemphasized the deflation fears
-The Fed states that the pace of economic contraction is slowing.
-The Fed continues its commitment to purchase Mortgage Back Securities from Fannie and Freddie, ensuring liquidity and rate pressure reductions.
What does this translate to us for the Real Estate and Mortgage Industry?
The below 5% mortgage rates on 30 year fixed mortgages are probably gone for good....no use waiting around for that to happen.
The market will remain a buyer's market with affordability at all time highs and a flood of foreclosure properties available
Expect rates to increase toward year end as the Fed is forced to deal with inflation risks as economy continues to improve
The home buyer's season should be robust; affordability, rates, tax credits, should make the season a good one
While no one can predict the absolute bottom of the market, we are at or near a bottom.
If you are waiting for additional discounts on sales price, you may lose out even if they get lower prices due to rising rates and the end of tax incentives.
Knowledge is power.
~Alicia
The Fed Meeting was in line with market expectations with no real surprises yesterday.
Highlights:
-Key interest rates will remain at current levels with no indication of immediate increases
-The Fed deemphasized the deflation fears
-The Fed states that the pace of economic contraction is slowing.
-The Fed continues its commitment to purchase Mortgage Back Securities from Fannie and Freddie, ensuring liquidity and rate pressure reductions.
What does this translate to us for the Real Estate and Mortgage Industry?
The below 5% mortgage rates on 30 year fixed mortgages are probably gone for good....no use waiting around for that to happen.
The market will remain a buyer's market with affordability at all time highs and a flood of foreclosure properties available
Expect rates to increase toward year end as the Fed is forced to deal with inflation risks as economy continues to improve
The home buyer's season should be robust; affordability, rates, tax credits, should make the season a good one
While no one can predict the absolute bottom of the market, we are at or near a bottom.
If you are waiting for additional discounts on sales price, you may lose out even if they get lower prices due to rising rates and the end of tax incentives.
Knowledge is power.
~Alicia
Sunday, June 14, 2009
First Time Home Buyers Class
Blogging From The Desk of Alicia Lagarde-Craig
Attention First Time Homebuyers:
Make Plans to attend a FREE FIRST TIME HOME BUYERS CLASS (Pre-Registration is REQUIRED to attend)
Take advantage of this educational event hosted by Keller Williams Realty New Orleans, America’s 3rd largest and fastest-growing real estate company! This is a fabulous opportunity to have all your questions answered. Learn all the steps to the home buying process including: how to make your best offer and pitfalls to avoid that will save you time and money!
FIRST THREE REGISTRANTS WILL RECEIVE A FREE COPY OF THE
Event Time & Location:
Keller Williams Realty New
Seating is Limited, Register Today
(Pre-Registration is REQUIRED):
Call The Craigs For Real Estate
Call Alicia Lagarde Craig at (504) 382-3724 or email your contact information to alicialagarde@kw.com (put “homebuyer class” in subject line)
Keller Williams Realty New Orleans, each office independently owned and operated. Alicia Lagarde Craig, agent licensed in the State of
Saturday, June 13, 2009
First-Time Home Buyer Class
Blogging From The Desk of Alicia Lagarde-Craig
Don't Miss This Fabulous Opportunity to attend a First Time Home Buyers Class hosted by Keller Williams Realty New Orleans. It will be held on Tuesday June 23, 2009 at Keller Williams Realty in New Orleans. This class will be held from 6:00 pm - 7:30 pm. (Class Details Below)
Don't Miss This Fabulous Opportunity to attend a First Time Home Buyers Class hosted by Keller Williams Realty New Orleans. It will be held on Tuesday June 23, 2009 at Keller Williams Realty in New Orleans. This class will be held from 6:00 pm - 7:30 pm. (Class Details Below)
Come find out why Keller Williams is the 3rd largest Real Estate Company in the United States. It's because your success is our goal!
Class Details:
Event:
First Time Home Buyers Class @ Keller Williams Realty New Orleans
Address:
8601 Leake Avenue
New Orleans, LA 70118
Time:
6:00 PM - 7:30 PM
Goal:
To teach the steps necessary to buy and maintain a home.
Registration:
Call or Email to Reserve. Seating is limited!
Alicia Lagarde Craig @ 504-382-3724 or AliciaLagarde@kw.com
or
Jeff Craig @ 504-352-6190 or JeffCraig@kw.com
Friday, May 29, 2009
$8000 Tax Credit- Updated Guidelines 5.29.2009
Blogging From The Desk of Alicia Lagarde-Craig
Thousands of first-time homebuyers will be able to get short-term loans so they can quickly make use of a new $8,000 tax credit that was designed to boost the battered U.S. housing market.
The Federal Housing Administration on Friday released details of a plan in which borrowers who use FHA loans can get advances from lenders that effectively let them receive the credit before they complete their taxes.
The FHA had no estimate of how many borrowers would qualify. But the agency, which backs about a quarter of new home loans, is projected to guarantee about 2.2 million loans in the next budget year.
Borrowers can claim the credit by filing an amended 2008 tax return or can wait for their 2009 return.
The change "will present an enormous benefit for communities struggling to deal with an oversupply of housing," Housing Secretary Shaun Donovan said in a statement.
Borrowers will still have to come up with the FHA's required 3.5 percent down payment, unless they work through a state or local housing program. But officials say the money can still be used for closing costs or a larger down payment.
The tax credit was included in the economic stimulus package signed by President Barack Obama in February.
Send all questions to: AliciaLagarde@kw.com
Thousands of first-time homebuyers will be able to get short-term loans so they can quickly make use of a new $8,000 tax credit that was designed to boost the battered U.S. housing market.
The Federal Housing Administration on Friday released details of a plan in which borrowers who use FHA loans can get advances from lenders that effectively let them receive the credit before they complete their taxes.
The FHA had no estimate of how many borrowers would qualify. But the agency, which backs about a quarter of new home loans, is projected to guarantee about 2.2 million loans in the next budget year.
Borrowers can claim the credit by filing an amended 2008 tax return or can wait for their 2009 return.
The change "will present an enormous benefit for communities struggling to deal with an oversupply of housing," Housing Secretary Shaun Donovan said in a statement.
Borrowers will still have to come up with the FHA's required 3.5 percent down payment, unless they work through a state or local housing program. But officials say the money can still be used for closing costs or a larger down payment.
The tax credit was included in the economic stimulus package signed by President Barack Obama in February.
Send all questions to: AliciaLagarde@kw.com
Tuesday, May 12, 2009
Pathway to Homeownership Soft-Second Mortgage Loan Program
Blogging From The Desk of Alicia Lagarde-Craig
Pathway to Homeownership Soft-Second Mortgage Loan Program
Own a Home. This is the Path.
Receive up to $65,000 soft second home mortgage at 0% interest.
100% forgivable in 10 years with continuous owner occupancy; payable only upon sale or refinance.
Up to $10,000 closing cost assistance grant also available.
Eligible Properties:
*One or two unit residences within one of the Orleans Parish Housing Opportunity Zones (see map on http://www.financeauthority.org/), or when the residence is part of the New Orleans Redevelopment Authority (NORA) Re-development Portfolio or when the seller can demonstrate at least $5200 of damages realized from Hurricane Katrina and/or Rita within Orleans Parish
*Maximum Property values: One unit, either New or Existing: $289,704; and Two unit, Existing Only: $370,884
*All properties must meet City Building Code and Zoning Code requirments as well as the physical standards and inspection procedures of FHA/VA, Fannie Mae or Freddie Mac mortgage loan product chosen by the borrower
*Newly constructed, reconstructed or renovated homes are eligible. Modular or panelized construction is also eligible
Eligible Borrowers:
*Have not owned a home within the last 3 years or no longer own your home because of a divorce or death of a spouse
*Have not received payments from Road Home under the 'sell' or 'relocate' option *Family incomes at or below the following:
1 person $50,280
2 persons $57,360
3 persons $64,560
4 persons $71,760
5 persons $77,520
6 persons $83,280
7 persons $89,040
8 persons $94,680
*12 Hour homebuyer education required
*Minimum personal investment of 1% of purchase price or $1500, whichever is greater
Steps to Buying Your New Home:
1. Visit the Finance Authority of New Orleans website to learn about the program at http://www.financeauthority.org/.
2. Gather your financial information: tax returns and W-2s for the last three consecutive years, pay-stubs within the last three months, financial documents related to all your sources of income, listing of all real estate investments, listing of all investments in stocks and/or bonds, listing of the balances due to any creditor or for any credit account owed.
3. Determine the first mortgage loan amount you can afford. You can do this by registering with a homebuyer training organization OR visiting a participating lender (see a list of homebuyer training organizations and participating lenders at http://www.financeauthority.org/). OR, you can complete a pre-application at our website http://www.financeauthority.org/ and a home counselor will call you.
4. Register with a participating homebuyer training organization certified by the Louisiana home-buyer Training Collaborative, Inc. and take the required 12-hour homebuyer education and training course. See our website for a list.
5. Complete a loan application with a participating lender. Please bring all documents gathered in step two to the participating lender.
6. Negotiate an Agreement to Purchase a home with the seller of a home in a Housing Opportunity Zone OR with New Orleans Redevelopment Authority (NORA) OR with a seller within Orleans Parish who can demonstrate $5200 of Hurricane Katrina/Rita damage. You should seek the assistance of a realtor in negotiating the agreement to purchase.
7. Close on your new home loan.
8. MOVE INTO YOUR NEW HOME!
To learn more about the Pathway to Homeownership Soft-Second Mortgage Loan Program, call (504) 524-5533 local or (877) 524-5533 toll-free
VISIT US AT http://www.financeauthority.org/
This home mortgage loan program is made possible by Louisiana Recovery Authority, State Office of Community Development, City of New Orleans & The Finance Authority of New Orleans. The Finance Authority does not discriminate on the basis of age, sex, religion, national origin, physical handicap, political or union affliation. No person, solely on the basis of any of the above factors, shall be excluded from participation in, be denied the benefits of, or otherwise be subjected to discrimination under the loan program operated by The Finance Authority of New Orleans. Effective Date: February 18, 2009
Sunday, March 22, 2009
$65,000 Soft Second Mortgage Offered to First Time Homebuyers in Orleans Parish
Blogging From The Desk of: Alicia Lagarde-Craig
The ‘Pathway to Homeownership’ Soft-Second Mortgage Loan Program offers soft-second home mortgage loans through participating lenders up to $65,000 at 0% interest with payments on the loan deferred until sale or refinance. In addition, the program offers up to $10,000 closing cost assistance when buying a home that will be your principal residence. The actual amount of the soft-second loan and closing cost grant received will be determined by need and annual household income, since the goal of this loan program is to cover the ‘gap’ between the highest affordable first mortgage loan for which you qualify and the purchase price or value of the home. The minimum amount of the first mortgage loan must be equal to at least 50% of the lesser of the purchase price of the home or the appraised value.
ALL BORROWERS OF A ‘PATHWAY TO HOMEOWNERSHIP’ SOFT-SECOND MORTGAGE LOAN MUST COMMIT TO REMAIN AN OWNER-OCCUPANT AT THE FINANCED HOME FOR AT LEAST THREE (3) YEARS. THOSE BORROWERS WHO DEMONSTRATE CONTINUAL OCCUPANCY FOR FIVE (5) YEARS WILL RECEIVE LOAN FORGIVENESS EQUAL TO 25% ON THE BALANCE OF THEIR ‘PATHWAY TO HOMEOWNERSHIP’ SOFT-SECOND MORTGAGE LOAN. AND AN ADDITIONAL 15% FOR EACH YEAR THEREAFTER FOR WHICH BORROWER DEMONSTRATES OWNER-OCCUPANCY.
The ‘Pathway to Homeownership’ Soft-Second Mortgage Loan Program does not discriminate on the grounds of race, sex, religion, age, disability or national origin.
To learn more about the ‘Pathway to Homeownership’ Soft-Second Mortgage Loan Program contact Alicia Lagarde Craig at (504) 382-3724 or Jeff Craig at (504) 352-6190. This is a great opportunity to get into your dream home and have an affordable monthly note.Please email questions or comments to AliciaLagarde@kw.com
Saturday, March 14, 2009
First-Time Home Buyer $8000 Tax Credit (2009)
Blogging From The Desk of Alicia Lagarde-Craig The recently passed American Recovery and Reinvestment Act, including the $8,000 tax credit for first-time buyers, presents an excellent opportunity for buyers ready to take advantage of today’s affordable market. Nonetheless, many first-time buyers might be unsure just exactly how the tax credit works or how it improves upon a similar credit offered last year.
I hope this blog will help you to understand the advantages of the $8,000 tax credit and capitalize on this financial incentive before it is no longer available. If you have any questions, please call Alicia at (504) 382-3724.
The American Recovery and Reinvestment Act of 2009 offers an $8,000 tax credit for first-time buyers who purchase a home on or after January 1, 2009 and before December 1, 2009.
Here are the specifics of the $8000 tax credit:
*The temporary credit is only available for home purchases made from January 1, 2009, but before December 1, 2009 and is equal to 10 percent of the cost of the home, up to a maximum credit of $8,000. (For example, a home purchased for $80,000 or more would qualify for the full $8,000 credit, while a $50,000 home would only qualify for 10 percent, or $5,000).
*Only first-time homebuyers can take advantage of the tax credit. A first-time buyer is defined under the tax credit as an individual who has not owned a home in the last three years. For married joint filers, both must meet the first-time homebuyer guidelines in order receive the tax credit when filing a joint return.
*There are income guidelines on the tax credit. Individuals with an adjusted gross income up to $75,000 (or $150,000 if filing jointly) are eligible for the full tax credit. The credit is phased down for those earning more and is not available for those with an income above $95,000 (or $170,000 if filing jointly).
*Buyers claim the credit on their federal income tax return to reduce their tax liability. If the credit is more than their total tax liability for that year, the buyer will get a refund check for the balance.
*Eligible properties include anything that will be used as a principal single-family residence. Single-family residences also including condos and townhouses.
*The new tax credit does not have to be repaid if the buyer stays in the home at least three years. But if the home is sold before that, the entire amount of the tax credit is recovered from the sale. People who purchased homes under the 2008 $7,500 tax credit program will still be required to repay that credit to the government over a 15-year period.
Send comments to AliciaLagarde@myNOLAhome.com
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