Time is Running Out.Time is Running Out.

The The $8,000$8,000 First-Time First-Time Home Buyer Tax Credit Home Buyer Tax Credit

has been extended.has been extended.

But only until April, 2010.But only until April, 2010. Created by Stephanie Crawford, REALTORCreated by Stephanie Crawford, REALTOR

www.NestingInNashville.comwww.NestingInNashville.com

What you should know What you should know about the tax credit….about the tax credit….

• It is a true cash credit or rebate – it is NOT an income deduction. That means money in your pocket for renovations, upgrades, furniture, debt, savings…. whatever you like!

• This particular credit is only available to home buyers who have not owned a portion of their primary residence at any time during the previous three years (this is the definition of a “first-time buyer”).

• Some buyers might qualify for a program that allows them to access their rebate upfront for help with down-payment and/or closing costs.

Opportunity TimeframeOpportunity Timeframe• There have been various incarnations of the Tax Credit over the past two years. In the past, the credit was considered to be a loan that had to be repaid over 15 years. The current version of the bill DOES NOT HAVE TO BE REPAID, but it does require a very specific timeframe for purchase.

• The home (new, old, condo, loft, duplex, townhome, all qualify) must be under written “binded” contract before April 30th 2010. It must be closed by July 1st 2010.

•at least 65 days to close so time is of the essence. An FHA backed loan typically takes

How Much Cash Do I Need?How Much Cash Do I Need?

Well, that’s the real question isn’t it? There are still several low-down-payment loan products on the market, but there aren’t any good 100% loans available anymore – at least not any that I would recommend.

Your basic options come down to these:

• FHA (3.5% down-payment)

•Conventional (as little as 5% down)

•THDA or Housing Fund (as little as 1% down IF you qualify based on income)

•VA – Veteran’s Loan (if certified)

Other Rules & GuidelinesOther Rules & Guidelines• Gross Income Limits - $125,000 single

$225,000 married

• Qualifying home price must be under $800,000.

• Property may not be purchased from a family member.

• If property is sold within three years of ownership a portion of the credit may be recaptured.

How do I get the cash?How do I get the cash?

You can attach IRS 5405 to your 2009 tax return for processing. If you were due to receive a $1,000 tax refund, you will now receive a $9,000 refund. Similarly, if you owed a $1,000 payment, you would now receive a $7,000 refund.

If you would like to gain access to your funds more quickly you also have the option to amend your 2008 tax return.

Either way, you must attach your HUD-1 settlement statement (a paper issued at closing) as proof of purchase.

What if I want to use the What if I want to use the credit towards my down-credit towards my down-payment?payment?

Rules on this vary from state to state. In Tennessee it is allowed, but the process is not free and it is a bit complicated. The Nashville Housing Fund, a non-profit lender, it the best local source for this type of program.

Their TCAL loan allows certain buyers to take out short-term loans of up to $8,000 for use towards down-payment and/or closing costs. Typically the buyer is required to repay this loan as soon as their IRS funds arrive. There are processing fees as well as monthly payments and interest until the loan is repaid.

It is important to remember that these loans are funded by grants which means that availability is not guaranteed. Income restrictions also apply. Also, most programs require that the buyer contribute at least

1% of their own funds toward closing.

Get Off The FenceGet Off The Fence

The Senate has stated that they do not plan to extend this credit beyond the April 30th 2010 deadline.

Interest rates are at near-historic lows.

Now’s the time to buy!

Stephanie CrawfordStephanie CrawfordREALTOR, e-PROREALTOR, e-PRO

I’d love the opportunity to consult with you about your purchasing options. Licensed since 2003 and a native Nashvillian, I have vast experience working with first-time buyers all over Davidson county.

Learn more:

www.NestingInNashville.com 615.554.3745