Are you currently in the process of looking to purchase a home for the 1st time? Do you have clients that may be struggling to come up with the down payment to purchase a home? If so, you need to be aware of one of the many benefits that will take effect due to the H.R. 3221 Bill that was singed by President Bush on July 30, 2008.

Within the H.R. 3221 Bill there is a provision that allows first time home buyers to have up to $7,500 as a tax credit for purchasing a house. The max is $7,500 or 10% of the purchase price, which ever is less. So as long as you have a purchase price over $75,000 your tax credit will be $7,500. This $7,500 tax credit is looked at as a loan and will need to be paid back over a period of 5 years. The exciting part is it is less than $42 a day and it is interest free money.

There are income restrictions on this money if you are single or married. If you are single you will not qualify for the full $7,500 if you make more than $75,000 a year. If you are married your combined income can not exceed $150,000. If for any reason your income does exceed these amounts when filed, your tax credit will be reduced from the full possible amount of $7,500.

You will need to pay your tax credit back in full if you decide to rent out the property while you still owe on your tax credit. They only way to get out of not paying this money back is if your number expires and you were to pass way.

Take advantage of your tax credit today by getting a loan from a family member! If you can’t wait until tax time to get your tax credit Perhaps a family member would be willing to gift you a down payment for your purchase today (with possible interest) and pay them back in full once the tax credit is recieved at tax time. If this is a plan that they decide to go with, please make sure to talk to a CPA who has possibly filed there taxes in the past. If they are an individual that usually has to pay on there taxes, they better be prepared to not get the entire $7,500 tax credit or what ever is due to them (Uncle Sam gets his slice of the cake before anyone). So if you were to file your taxes in 08′ and it turns out that you owe $1,500 and you were also expecting a tax credit  of $7,500. Your amount due to you will drop to $6,000. 

So if you are going to borrow from a family member with the anticipation to pay back at tax time, be sure that you know where you stand with your CPA.

I hope that this has shed some light on the new tax credit that is coming our way from the H.R. 3221 bill. 

Regards,

Fred D. Williams, Jr
Mortgage Advisor
Mid Valley Financial Services

Written by:  Mark Madsen - Las Vegas Home Loans

In response to the new “HOPE for Home Owners Act” (HR 3221) that was recently passed by the House of Representatives, FHA announced new Mortgage Insurance Premiums starting October 1, 2008 through September 30th, 2009. 

Up-front Mortgage Insurance Premiums:

• Purchase Money Mortgages and Refinances = 1.75%
• Streamline Refinances (all types) = 1.5%
• FHA Secure (Delinquent Mortgagors) = 3%

Monthly Mortgage Insurance Premiums:

• 30 yr mtg. -  LTV > 95%, monthly will be @ .55%
• 30 yr mtg. -  LTV < 95%, monthly will be @ .50%
• 15 yr mtg. -  LTV > 90%, monthly will be @ .25%
• 15 yr mtg. -  LTV < 90%, monthly will not be required.
• FHASecure - LTV > 95%, monthly will be @ .55%
• FHASecure - LTV < 95%, monthly will be @ .50% 

* This information was provided by Jeff Mifsud @ FHAGamePlan.com