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Both the Senate and the House have officially passed the extension of the Home Buyers Tax credit today.  The extension includes existing home owners for up to $6500 credit.  Up next President Obama.  More news to come.

The battle to extend the First Time Home Buyers tax credit has taken an even better twist.  Senate Democrats are not only in favor of extending the original credit but are also seeking to include existing home owners as well.  This is very good news for those that have not already taken advantage of the credit but even better for those that did not qualify under the previous plan.  The new proposal is to include a $6500 tax credit to existing home owners if they have lived in their current home for at least 5 years.  The buyers must make under $125,000/year single and $250,000/year married filing jointly.  According to a Senator Harry Reid aide Regan Lachapelle, the new proposal still faces some resistance from Republicans.  More information to come.

According to Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, the Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a down payment on a new home.   “We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down-payment,” Donovan said.    FHA’s approved lenders will be allowed to “monetize” the tax credit which in turn will allow eligible home buyers to access the funds immediately at the closing table vs. waiting for the credit on their 2009 tax returns. 

Anyone looking to take advantage of Tax credit but was unable to come come up with the down payment can now get in the game.  So what are you waiting for?  For more information read here.  

UPDATE:  May 18:

It looks like it may not be etched in stone just yet.   The Boston Globe  reported on Thursday that the letter was rescinded by HUD and.or FHA.   More news to come..

UPDATE May 29:

Its official HUD announced on Friday that first time home buyers can use the credit as a down payment.  According to NAHB economist Robert Dietz, lenders purchase tax credits from the buyers and then collect the rebate from the IRS.   This appears to be a better option than the bridge loans offered by some states prior to this announcement by the feds.

It appears that more than just homeowners are walking away from foreclosures.  Apparently banks are too.   This is thought by many to be the next wave of the housing crisis.

On another note the Old E. Baltimore project is mostly done but I still need to get past the inspections for city and section 8.   I’m on my fourth plumber now and counting.  Hopefully this one will get it right and actually pass the inspection.  Once that’s done I’ll post pics but its probably not a good idea to post them before.  Most of the work on this one was done prior to my purchase so the inspection is always a crap shoot.  It really just depends on the inspector and his/her mood.

Let the games begin!  Today, March 5 is the official first day that home owners can call their mortgage companies to apply for mortgage relief under the new Homeowner Affordability and Stability plan by the Obama administration.  Administration Officials said that homeowners could actually start making calls yesterday and banks like JPM Chase and SunTrust reported call volume increases of 150 and 50 percent respectively.   Homeowners will need to be patient as lenders scramble to get their systems in place to handle the huge increases in call volume.  Some callers have reported waiting for several hours before getting through to speak with a real person.  Banks such as Bank of America and Wells Fargo have given high marks to the plan along with many economists who think that the new guidelines will help with the current crisis.  Under the plan homeowners with loans as large as $729,750 may see their interest rates cut to as low as 2 percent.   The refinancing part of the program is expected to reduce payments for up to 5 million homeowners but is limited to loans owned or backed by Fannie Mae and Freddie Mac.  Homeowners must also apply by June 2010. 

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We’ve all heard the news that existing home sales in December 2009 surprisingly increased.  Previously owned homes in the US increased 6.5% to a 4.74-million-unit annual sales rate, according to the National Association of Realtors. This was very surprising considering most analysts had predicted sales at a 4.40 million unit pace.  Some analysts say that this could be a sign that the bottom is near., although the spark was mostly due to distressed foreclosure sales in states like California and Florida. 

Not everyone agrees that the housing market is anywhere near the bottom.   According to James R. Hagerty of the Wall Street Journal, economic indicators show that the housing market is not looking any better for spring 2009.    Dave Johnson and James Boyce of the Huffington Post believes that there is another entirely new bubble on the horizon that they refer to as the double bubble. 

It seems for every analyst predicting an upswing there is an antagonist waiting in the wings to disagree.   Heck!   That’s a 50/50 chance that it could swing either way.  Those odds are a lot better than at this time last year.

President Obama and Congress are finalizing an economic recovery bill that could be signed into law by next month. The bill has important implications for the Low-Income Housing Tax Credit (LIHTC).

The LIHTC is the nation’s largest, most successful affordable rental housing production program. But it has been hit hard by the financial crisis. Investment in the LIHTC fell from about $9 billion in 2007 to about $4-5 billion in 2008. It could drop even further in 2009.

Bringing the LIHTC program back to its full potential is one of the fastest ways to provide an economic stimulus while also assisting low-income working families, including victims of the foreclosure crisis.

BACKGROUND

The Low-Income Housing Tax Credit (LIHTC) is the nation’s largest and most successful affordable rental housing production program to date, financing more than two million homes since 1987 and about 120,000 annually in recent years. According to the National Council of State Housing Agencies, approximately 90 percent of all affordable rental housing is financed through the LIHTC. According to the National Association of Homebuilders, building 120,000 homes annually through the LIHTC supports 180,000 jobs annually. 

Source: Enterprise Community Partners

Have a great day and don’t forget its National Service Day.  This is a great opportunity to give in our communities.  The current conditions have created a need for more families than at any point in most of our lifetimes.  Let’s join President Obama and First Lady Michelle in this historic moment.  God Bless!

 2009 King Day of Service Will Be Largest Ever – 12,100 Projects and Counting!

Search for an event near you.

Note to president Obama… Our current financial system doesn’t work!  As if he really needed me to tell him that!  The current mortgage meltdown and credit crisis should tell us all one thing for sure.  We don’t know what the “h-e-double hockey sticks” we are doing in our financial markets.  Many years ago there were no banks or brokers to create this mess.  Banks served a great purpose in building our country to what it is/was.  But maybe its time that we do something different or in this case do it again but better.   What I am referring to is people investing in other people not banks.  Today this concept is commonly referred to as Peer to Peer lending. 

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According to three researches at the Federal Reserve Bank of New York, the 2005 bankruptcy law is another contributor to our economy in crisis.  The article states that prior to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, homeowners were able to file Chapter 7 liquidation.  This allowed them to continue to pay their mortgages while freeing themselves of unsecured (not asset backed) debt.  You can red the rest of the article here.