A report recently released by CNN Money states that the stimulus bill that passed the House of Representative contained a provision which seeks to amend the terms of “Housing and Recovery Act of 2008″ by, in essence, forgiving the $7,500 tax credit. The tax credit is actually an interest free loan, which is to be paid back over a 15 year period, but if the proposed provision passes the Senate, as well, then the tax credit would no longer be an interest free loan, but an actual tax credit. This would be great news to those who were able to take advantage of the provision.
One big question that I have is how this proposed provision will be affected by the new proposed provision, which will possibly increase the $7,500 limit to $15,000. If the new legislation offers $15,000 that does not need to be paid back, then I see a pretty strong incentive to purchase a home.
As the story continues to develop, I will be sure to update the blog. Be sure to check my previous entries on this topic by clicking on the Home Buyer Tax Credit Category on the side panel of the blog.
In a report just released by FoxNews.com, the GOP has added a provision to the current economic stimulus plan that would possibly increase the homebuyer tax credit up to $15,000. The proposal would also extend the provision to non-first time home buyers, according to the article. If they amend the previous limit in this manner, then it is likely that they will also extend qualifying time period beyond July 1, 2009.
At this point, however, this is only a possibility. We will know in a few days whether or not it passes and they amend the current provision by raising the limit to $15,000.
One of the big questions to be answered is whether or not those who have already purchased a home and received the $7,500 tax credit will be able to amend their returns and receive the additional $7,500 credit that is now being proposed. If not, then I think of lot of people are going to be fairly upset. There is much to watch here. Check back for updates and please leave any questions as a comment.
For more information about the tax credit click here to see my other posts on this developing topic.
I just received this update from Tom Thuss at Bank of Granite in Lenoir, NC about the current state of the USDA Guaranteed Rural Housing Program:
As many of you are aware, the USDA Guaranteed Rural Housing Program had been operating under a Congressional Continuing Funding Resolution that was approved in 10/08 and was supposed to provide sufficient funds for this program through the end of March. Due to unprecedented demand for USDA financing, the funding for this program was used up by early January. We have been forced to suspend the closing of any USDA loans until Congress gets additional funding approved. I am very confident that USDA will be funded soon but I do not know when that will occur. In the mean time, we are still able to handle your conventional, FHA and VA financing needs as usual. If one of your clients already has an application in process with me, their loans should close as expected.
If you have a client who wants to proceed with a USDA application, we can process and approve it so that it can close immediately after funding is approved. Obviously, this is going to require flexibility from your sellers.
Today, I was re-reading the applicable parts of HR 3221, which is the Housing and Economic Recovery Act of 2008, and I saw a section that should really be emphasized, which is as follows:
‘‘(g) ELECTION TO TREAT PURCHASE IN PRIOR YEAR.—In the
case of a purchase of a principal residence after December 31,
2008, and before July 1, 2009, a taxpayer may elect to treat such
purchase as made on December 31, 2008, for purposes of this
section (other than subsection (c).”
This section is stating that if you make a qualifying purchase between January 1, 2009 and July 1, 2009, then the IRS will consider that you purchased the home on December 31, 2008. This means that if you purchase a home between the 2009 dates above, you can go back amend your 2008 tax return and receive the tax credit. You do not have to wait until time to file your 2009 tax return. I hope that this helps.
A few months ago, I did a post on the $7,500 homebuyer tax credit, which is part of the Housing & Economic Recovery Act of 2008 or H.R. 3221. You can see those posts here:
Now that it is tax time, I’ve received a few questions regarding how to file for the tax credit. So attached to this post is the appropriate IRS Form and instructions for filing for the tax credit. It is IRS Form 5405 Homebuyer Tax Credit. The form includes instructions for how to complete it for those of you who file your taxes yourself.
Even if you have already filed your taxes, you can go back and amend your tax return if you were eligible for the credit, but did not file for it. I’ve had a couple of people e-mail me who asked about this and were able to amend their return without any problem.
I’ve also received a question about someone who is eligible for the return, but their spouse has an IRS lien. If the lien is against one spouse, then you may be able to file separately. But if you are able to do this, you will only qualify for $3,750 of half of the tax credit. This was done to make certain that spouses filing separately wouldn’t receive $15,000 by filing for the full $7,500 rebate. If you have other specific questions, please look at my previous posts first. If what you are looking for isn’t there, please post a comment, and I’ll be sure to answer it.
Caldwell County Commissioners voted early this week to delay property revaluations two years. Bobby White, the interim County Manager, said that NC requires that counties perform a tax revaluation every eight years. Since 1997, Caldwell County has chosen to do this every four years. This means that the next normal revaluation would have been in 2009. The Commissioners voted to move it to 2011. Mack, the county tax administrator, said that he anticipated property values to increase on average 12 to 18 percent, if the revaluation took place this year. The commissioners cited current economic conditions as the primary reason for delaying the revaluation. The resolution passed unanimously. What this means for the taxpayer is that they can expect a higher jump in property values in 2011 than the typical increase that takes place every four years. You can watch the video of the meeting below.
In case you missed the article in the Sunday edition of the Charlotte Observer, the Viewmont area of Hickory is getting a new 50,000 sq.ft. Lowe’s Foods. The store will be located besides Lowe’s Hardware behind Starbucks & Checkers. The new complex will also include a new building for Backstreet’s Bar & Grill, a local favorite. Backstreets will remain open at the current location until they are able to open in the new building.
As a side bit, you may find it interesting to know that Lowe’s Foods was started by the same family that founded Lowe’s Hardware in Wilkesboro, NC. The company is currently owned by Alex Lee, but it is interesting to note its humble beginnings.
Let’s first begin by saying that a FICO score and a Beacon score is the same thing.It is a score which is calculated based upon a number of factor related to an individuals credit worthiness which gives a numeric indication of one’s credit reliability.The typical range is understood to be between 300 and 850, but this is debated.For an interesting take on the mathematics of the beacon score check here. The basic idea that you want to have associated with the FICO or Beacon score is that it attempts to quantify the likelihood that you will make your payment on time or as agreed.The higher your score the better you are rated.
There are three different major credit agencies that report credit scores: Equifax, Experian, & Transunion.Although they market their scores under different names, it is basically the same.There may be a slight variation based upon the information that may be present in the credit file of one company while it may not be in the credit file of another company.
Below is a chart from BankRate.com that shows the breakdown of the US population’s credit scores.For instance, 12 percent of the population has a score between 600-649.
Credit score
Percentage
499 and below
2 percent
500-549
5 percent
550-599
8 percent
600-649
12 percent
650-699
15 percent
700-749
18 percent
750-799
27 percent
800 and above
13 percent
It is important that you know your score if you are seeking a loan for a home because it let’s you know how the bank will view you.The higher your score, the more desirable you will be as a client.You can get a free credit report at a number of places online.I personally use Experian to monitor my credit report and rate, but it is a fee service.You can also estimate your score at BankRate.com by clicking here.I did it myself and it came in a little lower than my actual score, but it seems rather accurate for those who are just curious.
The Charlotte Observer is citing a new census report showing that North Carolina, the nation’s tenth largest state, is the 4th fastest growing state in the nation, just behind Texas, Utah, & Arizona. The report in the Observer cites jobs, climate, & quality of life as the primary reasons motivating individuals to move to North Carolina. You can read the full report here.
What I find particularly interesting about this report is that NC is experiencing growth even when such a large portion of the jobs has been traditionally rooted in the manufacturing industry. What this says is that North Carolina has a truly diverse economy that is able to support growth even during a downturn in the economy. Granted you will have pockets throughout the state, which do not have a very diverse economy, but in those County’s which had the highest growth (Wake, Union, Meck) there is a diverse economy that has continued to create jobs even during the down economy, according to the report.
Posted by Joseph Griffin 
Posted by Joseph Griffin 
Posted by Joseph Griffin 
