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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   The Boston Globe  reported on Thursday that the letter was rescinded by HUD and.or FHA.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’s been a while since my last post but I promise I won’t be long winded this time.  I’ve decided that I’m going to sell Old E Baltimore project.  The work has been done for over a month but with a few loose ends to tie up.  The house has a new furnace, hot water heater, toilets, tub, tile, refrigerator, oven, cabinets, carpet, deck, fencing, flooring, carpet, rails, and the list goes on.  It’s a great opportunity for an investor looking to get a rehabbed house with 4 bedrooms in the city.  Currently through section 8, the new owner could be looking at over 1100 dollars per month and a mortgage payment of less than $550.  My next post on this property will include pictures but if anyone is interested in seeing the house, feel free to click on the About Fliprent link at the top and click the Contact Me link to send me an email.  You can also leave a comment on this article if you choose to.

Ideas, Ideas.  I’ve decided to go forward with a business idea that I’ve had for a while.  I’m going to need to put some cash into it considering how difficult it is to get a business loan in the current economy.  Liquidity is a beautiful thing when you need access to quick capital.  There was a time, just a few years ago when a residential real estate investment was considered relatively liquid.  Today is another story. 

So far I like what I’ve seen from the American Recovery and Reinvestment Act (ARRA) signed by President Obama last Tuesday.   From a Tax perspective it appears to contain some very good relief for the average American citizen.  Some of the highlights from the new plan include a new refundable credit of up to $800 for lower and middle income America.  Unless you make more than 95k single or 190K MFJ, you should qualify for this credit.

 Also included in the ARRA economic stimulus plan is an expanded Hope Credit. The new credit is called the American Opportunity Tax Credit.  The new credit can be taken for all 4 years of college instead of the first two and has been increased to a maximum of $2500.   The best part of this credit may be that up to 40% of the credit is refundable.  This means that it can be added to your refund or perhaps even result in a refund even when the taxpayer would have otherwise owed.  Also parents with Section 529 plans for their kid’s college will be happy to know that computers and Internet access are now considered qualified higher education expenses for purposes of the section 529 distributions.

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