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By now it is well documented that today’s affordable housing prices, historically low interest rates and federal home buyer tax credit have combined to create one of the most attractive first-time buyer markets in recent memory. What many Americans might not realize is that a recent expansion of the buyer tax credit has created an equally desirable opportunity for existing homeowners.

This past November, Congress elected to expand the home buyer tax credit to repeat buyers after seeing the success the temporary financial incentive had on the housing market and overall economy. As a result, current homeowners who will have lived in their home for 5 consecutive years out of the last 8 may now be eligible to receive a $6,500 tax credit.

“The expanded tax credit offers a great financial opportunity for existing homeowners, particularly those looking to trade up,” said James M. Weichert, president and founder of Weichert, Realtors, one of the nation’s largest independent real estate companies. “Not only can you receive a large sum of money from the government, you’ll also likely purchase your next home for less money and at a lower interest rate than you could have in years past or years to come.”

To qualify for the tax credit, the repeat buyer must have signed a binding contract by April 30, 2010 and close on the home by June 30, 2010. Tax credit eligibility is subject to income limits, $125,000 for single buyers and $225,000 for couples. In addition, the sale price of the home being purchased can not exceed $800,000.

There is no requirement that existing homeowners must have sold their home to be eligible for the $6,500 tax credit. However, Weichert encourages existing homeowners who want to benefit from this incentive to move quickly, particularly those who prefer to first sell their current home before purchasing a new one.

“Typically, it takes three months or longer to sell a home. That’s why it is critical repeat buyers put their home on the market right away. Otherwise they might not leave themselves enough time to both secure a buyer for their current house and find a new home by the April 30 deadline,” added Weichert.

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RISMEDIA, November 6, 2009—President Barack Obama has approved the first-time homebuyer tax credit extension which will extend the tax credit until April 30, 2010.

The extension is part of a $24 billion economic stimulus bill that will extend the $8,000 tax credit for homebuyers who are purchasing their first home from the current November 30 deadline and expands the program to offer a credit of $6,500 to homeowners who have lived in their current home for at least five years and are seeking to relocate.

The following details apply to the homebuyer tax credit expansion:

Who is Eligible
-First-time homebuyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.
-Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.
-All U.S. citizens who file taxes are eligible to participate in the program.

Income Limits
Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.
-For married couples filing a joint return, the combined income limit is $225,000.
-Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
-The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.

Effective Dates
-The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.

Types of Homes that Qualify
-All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.

Tax Credit is Refundable
-A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.
-For example:
-A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit).
-A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).
-All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return.

Payback Provisions
The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

The www.federalhousingtaxcredit.com site is being updated. Check the site next week for more detailed information on the new tax credit.

For more information, visit www.nahb.org.

Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6500.  Anyone who has not owned a home in the last 3 years (including first time home-buyers) would still get up to $8000.   This tax credit is only good for primary residences costing less than $800,000.  There is a phase out for individuals with incomes of greater than $125,000 and $225,000 for joint filers. 

To qualify one must sign a purchase agreement by April 20, 2010 and close by June 30, 2010.  As always, consult your tax professional before making any tax related decisions.

The following aritcle was posted byRISMedia on 10/30/09.  Could prove to be an interesting debate in the House and Senate.

By Alan J. Heavens, Corey Boles, John D. McKinnon

With low mortgage rates and a federal incentive for first-time homebuyers, you might be enticed to buy a place or refinance the one you’re in.

But new regulations on brokers, appraisers and mortgage lenders have changed the rules for getting or refinancing a mortgage. Some rules went into effect this month, and others will kick in soon.

“Over the past year, getting a mortgage as a buyer or when refinancing has become more arduous and more expensive,” said Dale Robyn Siegel, author of “The New Rules for Mortgages.”

Here are a few tips, some accounting for fallout from the credit crisis.

Don’t use a mortgage broker unless you need hand holding. In the past, brokers typically shopped your loan to multiple lenders, which was a big help. But new regulations have hamstrung their ability to efficiently shop for the best deal. Among them is a rule that lenders can’t accept home appraisals commissioned by brokers. So, you’ll have to pay for new appraisals with each lender, which costs time and money.

In the end, you’re probably better off shopping for a mortgage by yourself, said Siegel, who owns a mortgage brokerage in White Plains, N.Y.

However, if you’re very busy or need hand holding, it could be worth using a broker, she said. Just realize you’ll pay a slightly higher interest rate because that’s how the broker gets paid.

Shape up your credit. You barely needed to fog a mirror to get a mortgage or refi a few years ago. Today, it’s different.

“Qualifying for a mortgage is the most difficult it has been in decades,” said Dale Vermillion, author of “Navigating the Mortgage Maze.”

Starting Nov. 1 or Dec. 12, depending on the type of loan, anybody with a credit score of less than 620 will have a very difficult time getting a mortgage. That’s because government-backed mortgage financier Fannie Mae is tightening lending standards to the 620 benchmark, even for loans backed by a federal agency such as the Federal Housing Administration or Veterans Affairs.

To get the best rates — and save money on monthly payments — you’ll need a score of about 720 and have a verifiable, steady income, Vermillion said.

So, take steps to raise your credit score. The scoring formula is complicated, and specifics are secret. But the best ways to raise your score are: pay bills on time and pay off debt. Less known are to never close an old credit card account and try to use a very small percentage of your available credit, regardless of whether you pay off your card balance every month. And check reports at Annualcreditreport.com.

Get a fixed-rate mortgage. The vast majority of buyers and refinancers are better off with a rate that won’t change, Siegel and Vermillion agree.

“Why are you taking out an adjustable-rate mortgage that’s going to change in five years when you can take out a 30-year fixed and never think about it again?” Siegel said.

With a primary residence, it’s usually best to think long term, and that means a fixed-rate mortgage.

Gregory Karp is a personal finance writer for The Morning Call, Allentown, Pa., and author of “Living Rich by Spending Smart.”

     The hardest part of the move will probably be deciding (or agreeing) what “stuff” to part with, and how to do it.  We had a garage sale over the Labor Day weekend that was very successful.

     One should also consult their tax adviser to find out about the tax consequences of downsizing.

Of the $64.5 million, 70% will be used for new construction, replacement of portables, and for expansion of programs such as the Two Way Immersion that require new facilities to continue. The remainder along with the matching funds from the Career Technical Education grants will provide new facilities to help our local students keep pace with kids from other districts in the state.

The big question is how much will this bond cost each homeowner. Being a tax assessment the amount of $28.70 per $100,000 of assessed (not appraised) value will be added to your tax bill. If your home is assessed at $275,000, your tax bill will increase by $78.93 from Measure G.

We have all seen our home values decline fairly dramatically in the last 18 months. It is possible to have your property reassessed by contacting the El Dorado County Assessors Office. You can call the Assessors local office at (530) 573-3422, or by Internet at http://co.el-dorado.ca.us/assessor/prop8form.asp for the pages containing the necessary forms to complete for reassessment.

Hopefully this bond with its school improvements will help to enhance our already great community.