Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration's new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today's action will help stabilize the nation's housing market by stimulating home sales across the country.
The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today's announcement details FHA's rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA's new mortgagee letter, visit HUD's website.
"We believe this is a real win for everyone," said Donovan. "Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation's housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we're doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing."
Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today's announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower's own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today's action permits the first-time homebuyer's anticipated tax credit under the Recovery Act to be applied toward the family's home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.
According to estimates by the National Association of Home Builders, the Administration's homebuyer tax credit will stimulate 160,000 home sales across the nation - 101,000 of which will be first-time buyers who will receive the credit. Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home. Given FHA's current market share, it's estimated that thousands of families will be able to purchase a home by allowing the anticipated tax credit to be applied toward their purchase together with an FHA-insured mortgage.
Homebuyers should beware of mortgage scams and carefully compare benefits and costs when seeking out tax credit monetization services. Programs will vary from organization to organization and borrowers should consider whether the services make sense for them, as well as what company offers the most suitable and affordable option.
For every FHA borrower who is assisted through the tax credit program, FHA will collect the name and employer identification number of the organization providing the service as well as associated fees and charges. FHA will use this information to track the business closely and will refer any questionable practices to the appropriate regulatory agencies, as necessary.
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HUD is the nation's housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.
Saturday, May 30, 2009
Strongsville Real Estate - NEW LISTING - 05/26/2009 - 17207 Gold Rush Road (Strongsville,Ohio) - Deerfield Lake - WWW.CJHARRINGTON.COM
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Central A/C
Friday, May 29, 2009
HUD Home Information - Why can’t I say “HUD Foreclosure” or “HUD Repo” when I advertise these properties? - www.cjharrington.com
It misleads the public. HUD did not and does not foreclose.
“Repo” is a slang term that is used for personal property, with negative connotations. HUD finds these terms unnecessary and even offensive in real estate transactions.
HUD does not foreclose. It is the lender or “mortgagee” that was forced to foreclose due to default by the owner/borrower (mortgagor) on the terms of repayment of the FHA loan.
As the insurer for FHA loans, HUD accepts the property that was collateral for the mortgage and pays the mortgagee the insured unpaid loan amount, plus costs of foreclosure.
HUD becomes a receiver for the property after the foreclosure action is completed and the property is conveyed to HUD in exchange for the payment of the claim.
We want the public to regard these properties as potential homes, thinking positively toward the future, not looking backwards to the unfortunate past.
Agents and brokers who will not represent HUD-owned homes in a favorable way should not advertise them at all.
“Repo” is a slang term that is used for personal property, with negative connotations. HUD finds these terms unnecessary and even offensive in real estate transactions.
HUD does not foreclose. It is the lender or “mortgagee” that was forced to foreclose due to default by the owner/borrower (mortgagor) on the terms of repayment of the FHA loan.
As the insurer for FHA loans, HUD accepts the property that was collateral for the mortgage and pays the mortgagee the insured unpaid loan amount, plus costs of foreclosure.
HUD becomes a receiver for the property after the foreclosure action is completed and the property is conveyed to HUD in exchange for the payment of the claim.
We want the public to regard these properties as potential homes, thinking positively toward the future, not looking backwards to the unfortunate past.
Agents and brokers who will not represent HUD-owned homes in a favorable way should not advertise them at all.
Strongsville Real Estate - NEW LISTING - 05/26/09 - 17207 Gold Rush Road (Strongsville,Ohio) - Deerfield Lake - WWW.CJHARRINGTON.COM
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Thursday, May 28, 2009
HUD Home Information - When does the 15-day inspection period begin? - WWW.CJHARRINGTON.COM
All dates begin with contract ratification, which is the date NHMS personnel sign on behalf of HUD as the Seller.
There should not be more than a few days between the time the HUD-9548 Sales Contract is ratified and the time it is delivered back to the buyer’s agent electronically.
If there is a lengthier delay in delivery due to high volume of transactions, holidays, etc., and you need more time to complete inspections, you can request an additional few days by email to Info.Ohio@NHSMI.com.
There should not be more than a few days between the time the HUD-9548 Sales Contract is ratified and the time it is delivered back to the buyer’s agent electronically.
If there is a lengthier delay in delivery due to high volume of transactions, holidays, etc., and you need more time to complete inspections, you can request an additional few days by email to Info.Ohio@NHSMI.com.
Strongsville Real Estate - FEATURED HOME - 05/26/09 - 20688 Lunn Road (Strongsville, Ohio)-Sterling Point - WWW.CJHARRINGTON.COM
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