I Owe More for My Home then it is Worth.

Good Morning, this is an interesting time in our country. Let alone the business of home ownership. Many of members of our family, friends and neighbors actually owe more on their homes then they are worth. That can create a real problem for any one of them if they want to relocate or are considering an upsize or down size in their home.

When someone owes more then their home is worth it can bring on a lot of stress and concern. Every situation is different. We work with friends and neighbors all across the area helping them to find their way through these problems. If you know have a friend, family member, or neighbor who could use our input be sure and give us a call. We are willing to help.

Your Friends in the Real Estate Business,

Ed & Sheila Rudolph

Tax credit for first time home buyers ends November 30, 2009.

The questions continue how can I use this Tax Credit as a down payment? The National Association of Realtors did a good job answering that question. This is not the time to back off this is the time to buy! Interest rates remain low, housing prices are low and things are starting to make a turn for the better.

At the bottom of this report you will see a link to more information! Take a look.

Ed
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USING THE FIRST-TIME HOME BUYER TAX CREDIT AS
DOWN PAYMENT ON A FHA-INSURED MORTGAGE
On May 29, 2009, the U.S. Department of Housing and Urban Development (HUD) announced a program that allows borrowers to use the first-time home buyer tax credit for a down payment or closing costs on a FHA-insured mortgage. Since the announcement NAR has received many inquiries from our members regarding how this impacts first-time homebuyers in their state.

HOW TO USE THE CREDIT
Currently, 11 state housing finance agencies (HFAs) offer a product buyers can use that will
effectively monetize the tax credit for down payment purposes. Generally, these programs offer tax credit advances with second liens on the home being purchased. The second lien may be “soft” (silent) or require monthly payments but may not result in cash back to the borrower and may not exceed the total amount needed for the down payment, closing costs, and prepaid expenses. The 11 states offering these programs are Colorado, Delaware, Idaho, Kentucky, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, Tennessee, and Virginia. Other states are developing programs so members are encouraged to regularly follow up with their respective HFA.

STATES WITHOUT A HFA PROGRAM
For all other states where such HFA programs do not exist the tax credit may
not be used to fund the 3.5 percent down payment required for FHA loans. As
always, the 3.5 percent down payment may be a gift from a family member,
employer or nonprofit, charitable organization. FHA-approved nonprofit
organizations and FHA-approved lenders may monetize the tax credit for down
payments in excess of 3.5 percent, closing costs and interest rate buy downs.
Mortgage industry leaders have indicated that this type of product may not be
immediately available to consumers.

EXAMPLE OF TAX CREDIT IN USE
WITHOUT HFA PROGRAM
In conjunction with an IdaMortgage loan, a subordinate loan will be offered to qualified
first-time home buyers a maximum of 5% of the sales price up to $7,000, not to exceed
100% combined loan to value. A fee will be charged of $250 with $150 refunded upon
repayment of the loan on or before the loan due date. The loan will accrue interest at 3.0%
with a due date of July 1, 2010. The Tax Credit Second Loan is expected to be paid off from
the borrower’s tax refund obtained through the application of the federal tax credit.
Borrower must be a first-time home buyer and qualify for an IdaMortgage loan.
“Welcome Home Idaho”. Idaho REALTORS® will pay off the interest for first-time buyers
using IdaMortgage program.

For more information visit www.realtor.org/government_affairs