Must Close by November 30, 2009 to take advantage of $8,000 Federal Mortgage Incentive

Since Congress passed the American Recovery and Reinvestment Act, many have seized the opportunity offered by the $8,000 tax credit for first-time home buyers. When you factor in today's historically-low interest rates and housing affordability with the financial opportunities
"It's hard to imagine a better time than right now to be a first-time buyer," said Jim Weichert, president and founder of Weichert, REALTORS. "Mortgage rates and home prices are all favorable. Recent economic news is encouraging and the government is providing a large financial incentive.
In addition to taking advantage of the tax credit, another reason for first-time buyers to consider making a purchase now are the recent signs of a stabilizing real estate market. Last week, NAR announced that home sales increased in 39 states in the second quarter of the year compared to the first. Last month, the S&P/Case-Shiller index showed an increase
Source: Weichert REALTORS

$8,000 Credit Toward Down Payment and Closing Costs

U.S. Housing and Urban Development Secretary, Shaun Donovan, announced today that the Federal Housing Administration (FHA) will allow homebuyers to apply the federal $8,000 first-time homebuyer tax credit toward the purchse costs of an FHA insured home loan.

The American Recovery and Reinvestment Act of 2009 offers home buyers a tax credit of up to $8,000 for purchasing their first home. Buyers can access this credit after filing their tax returns with the IRS. Today's announcement details FHA's rules allowing state finance housing agencies to "monetize" up to the full amount of the tax credit so that the borrowers can immediately apply the funds toward their down payment. Home buyers using FHA-approved lenders can apply tax credit to their down payment in excess of 3.5% required of their own funds which can help reduce their interest rate or lower their borrowed amount. To read the FHA's new mortgagee letter please visit HUD's website.

Currently, borrowers applying for an FHA insured mortgage are required to make a minimum down payment of 3.5%. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5% 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. In addition to the borrower's own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the down payment. This program will allow home buyers to shop for the best price and services using their anticipated tax credit. These purchases may also free up existing home owners to purchase another home because a first time buyer purchased their home.

For a personalized discussion about how this may affect your own situation please call the Schrand Team at 513-347-1715.

Local Market Doing Better

Pending Sales Up More Locally than Nationally
Washington, May 4, 2009

Source: Cincinnati Area Board of Realtors

Pending home sales rose with many first-time buyers taking advantage of historically good housing affordability conditions, according to the National Association of Realtors®.The Pending Home Sales Index, a forward-looking indicator based on contracts signed in March, increased 3.2% to an “index” of 84.6 from a level of 82.0 in February, and is 1.1% higher than March 2008 when it was 83.7.

From CABR: Numbers for March were greater locally than nationally. March 2009 Cincy MLS pendings were up 22.7% from February, and up 3.5% from March one year ago.

Lawrence Yun, NAR chief economist, said it should take a few months for the market to gain momentum. “This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a down payment,” he said. “We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around.”

NAR’s Housing Affordability Index (HAI) remained near record highs. The affordability index was 166.7 in March – down from an upwardly revised record of 174.4 in February due to higher home prices in March. The index remains 30.8% higher than a year ago. The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income; tacking began in 1970.

The Pending Home Sales Index in the South rose 8.5% to 93.2 in March and is 7.7% above a year ago. In the West the index increased 3.9% to 93.1 and is 1.7% higher than in March 2008. The index in the Northeast fell 5.7% to 59.5 in March and is 24.1% below a year ago. In the Midwest the index slipped 1.0% to 82.3 but is 8.2% higher than in March 2008.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the increase in buying power is quite remarkable. “Compared to a year ago, the typical family can pay much less in mortgage costs for the same home, or buy a better home without necessarily increasing their monthly payment,” he said. “For buyers who’ve been on the sidelines and have good jobs, the market has never looked more favorable. Homeownership has always offered immediate benefits and long-term value, but the advantages in today’s market are unique.”

A median-income family, earning $61,100, could afford a home costing $291,600 in March with a 20% down payment, assuming 25% of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small down payments are roughly 80% of that amount. The affordable price was notably higher than the median existing single-family home price in March, which was $174,900.The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

1956 Cincinnati Reds

Pictured to the left is the "Ole Left Hander", Joe Nuxhall. (1928-2007) We still miss him. See if you can find him on the U-Tube post below.

This one is especially for us "ole timers" who can remember the 1956 Cincinnati Reds. Now that the new season has started it's fun to look back. See if you can remember these players.

There's no other pass time and no other sport quite like Cincinnati Reds Baseball.

By the way, how did you do in identifying these Cincinnati ballplayers. Did the "What's My Line" show bring back memories too?

Housing Experts: The Ship Is Slowly Turning Around

On March 23rd Jack Schrand appeared on WCPO-TV Channel 9 in Cincinnati in their story "Housing Experts: The Ship Is Slowly Turning Around". Reporter, Tom McKee, interviewed Schrand and other key players in the local real estate industry from the Cincinnati Area Board of Realtors. You can read the written article or view the television segment at this link.

There are certainly opportunities available in this market. If you have been thinking of making a housing move or are planning to purchase your first home please call us. We will help you get a realistic perspective of the opportunities and realities of today's housing market. While this is an excellent time for some to make a move; it may not be for others. Let's talk about it.

What is a Short Sale?

Short sales are becoming more common in today's market because some home owners owe more on their mortgage than the home will sell for. In a short sale the lender, or lenders if there is more than one mortgage, is willing to accept less money than is owed to pay off the mortgage(s). The home is then sold "short" of what is owed. This allows both the home owner and their lender to avoid the expensive and devastating prospect of foreclosure.

The lender is not required to accept a "short sale" offer and often takes a long time to come to this decision. In most cases short sales are anything but "short". It usually takes much longer to receive an acceptance to your offer than would normally be the case. We may be talking weeks or even months instead of days. They are not for everyone; but sometimes offer an opportunity to purchase a home at a slightly less than market price. The homes are almost certainly sold "as-is" and frequently involve some deferred maintenance.

The bank involved is sometimes willing, and often eager, to continue to look at and accept other offers from different buyers until a written acceptance is obtained. As stated already, this may take some time to receive. This type of purchase is not for the faint of heart. Disappointments often occur. It is so very important to have a Realtor working for you who can guide you through this process. If you don't like surprises then a more traditional purchase may suit you better.

If you would like to discuss the opportunities available to you in this market we are ready to assist you. Whether it's a short sale, a foreclosure or a traditional sale it pays to know what's involved before you make the leap. There are also many financing opportunities that should also be discussed. Call us. We can help.

Frequently Asked Questions About the 1st Time Buyer Tax Credit

Question: If I haven't filed my 2008 income tax return yet can I claim the the $8,000 credit for a home purchased on or after January 1st, 2009?

Answer: YES! You can claim it on your return due April 15th. You can file for an extension or even amend a previously filed return.

Question: Do I have to repay the tax credit?

Answer: Not as long as you stay in the home for three years.

Question: Is there an "adjust4ed gross" income restriction (line 37 on IRS form 1040)?

Answer: YES> It's $$75,000 for single or head of household. It's $150,000 for marries couples filing jointly.

Please check with your own tax advisor to confirm your own personal eligibility for this program.