Posts Tagged ‘mortgage information’

Hud Announces Billions For Recovery Grants To Help Stabilize Brooklyn Neighborhoods

Sunday, January 17th, 2010

HUD SECRETARY DONOVAN ANNOUNCES $2 BILLION IN RECOVERY ACT GRANTS TO STABILIZE NEIGHBORHOODS, REBUILD LOCAL ECONOMIES
Stabilization grants to help neighborhoods recover from the housing crisis

WASHINGTON – U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan announced today that HUD is awarding $2 billion in Recovery Act funding to states, local governments and non-profit housing developers, under HUD’s Neighborhood Stabilization Program (NSP), to spur economic development in hard-hit communities and create jobs. Nearly 60 grantees are receiving awards. A full list of grants awarded today can be found on HUD’s Recovery Act website.

Funded through the American Recovery and Reinvestment Act, this round of NSP grants is being awarded competitively to applicants who developed the most innovative ideas to rebuild local communities, while demonstrating that they have the capacity to be responsible stewards of taxpayer dollars.

“By investing Recovery Act dollars in revitalizing hard-hit neighborhoods, we’re not only creating new job opportunities, but giving communities across the country an opportunity for a fresh start,” said Vice President Biden. “These competitive awards go to the heart of the Recovery Act: funding innovative projects that both provide immediate relief and help lay a new foundation for long-term economic growth.”

“Vacant homes have a debilitating effect on neighborhoods and often lead to reduced property values, blight, and neighborhood decay,” said Donovan. “This additional $2 billion in Recovery Act funding will help stabilize hard hit communities by turning vacant homes into affordable housing opportunities. The Neighborhood Stabilization program is a key part of the Obama Administration’s comprehensive approach to address the national housing and economic crisis.”

The $2 billion in NSP grants being awarded today will build on the work being done now to help state and local governments and non-profit developers collaborate to acquire land and property; to demolish or rehabilitate abandoned properties; and/or to offer down-payment and closing cost assistance to low- to middle-income homebuyers. Grantees can also create “land banks” to assemble, temporarily manage, and dispose of foreclosed homes.

The awards will also require housing counseling for families receiving homebuyer assistance funds through NSP. In addition, it will protect homebuyers by requiring grantees to ensure that new homebuyers under this program obtain a mortgage from a lender who agrees to comply with sound lending practices.

The Neighborhood Stabilization Program was created to redevelop hard-hit communities, create jobs, and grow local economies by providing communities with the resources to purchase and rehabilitate vacant homes and convert them to affordable housing. Last year, HUD awarded nearly $4 billion in NSP formula funds to over 300 grantees nationwide to help state and local governments respond to the housing crisis and falling home values.

In addition, on August 26, 2009, HUD awarded $50 million in technical assistance grants to help grantees more effectively manage the inventory of abandoned homes they purchase under the Neighborhood Stabilization Program. HUD’s NSP technical assistance grants are helping NSP recipients to implement sound underwriting, management, and fiscal controls; measure outcomes created by public funds; build the capacity of public-private partnerships; develop strategies to serve low-income households; incorporate energy efficiency into NSP programs; provide support, and training on the operation of ‘land banks’; and train NSP recipients on HUD program rules and financial management requirements.

President Obama signed the Recovery Act into law on February 17, 2009 as the country faced the greatest economic crisis since the Great Depression. The $787 billion Recovery Act program has already provided nearly $100 billion in tax relief for families and businesses, helped fill critical budget gaps for hard-hit state and local governments and jump-started tens of thousands of projects that are creating jobs and laying a new foundation for long-term economic growth. To learn more about the story of the Recovery Act, visit www.WhiteHouse.gov/Recovery. To follow Recovery Act dollars, visit www.Recovery.gov.

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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.


Charles D’Alessandro

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How to Pay Off Your Brooklyn Real Estate Mortgage Early

Saturday, January 16th, 2010

Few things sound better than paying off a thirty-year Brooklyn real estate mortgage early.  Not only will you be free of mortgage payments, you could also save thousands of dollars in interest payments over the life of the loan.  Here are four ideas to help you pay off your mortgage early:

  1. Apply any windfall monies you receive to your mortgage balance.  Be sure to indicate that this is an extra payment and should be applied exclusively to your principle.
  2. Make bi-weekly mortgage payments.  Making exactly one-half payment every two weeks will add up to a total of twenty-six half payments per year.  Or, thirteen whole payments each year instead of twelve.  That’s the secret to paying off a Brooklyn real estate mortgage early with bi-weekly payments.  The interest rate itself isn’t reduced, but the amount of money you pay in interest on the principal is.
  3. Overpay a fixed amount every month.  By sending in an extra fixed amount as an additional principal payment every month, you’ll reduce the length of time it takes you to pay off your mortgage. By sending in a fixed amount every month, you can easily automate this process.
  4. Use a prepayment calculator to figure out other ways to pay your mortgage off early.  The free prepayment calculators available on the internet can also help you determine how quickly you can become mortgage free.

Before implementing any of these methods to pay off your Brooklyn real estate mortgage early, contact your mortgage lender to find out if you’ll be incurring any additional fees.  It’s also a good idea to ask your mortgage lender if there are any specific instructions you need to follow to be sure your payments are processed correctly.

Thinking about buying a home in Brooklyn New York that you can pay off quickly?  Call me now at (718) 253-9600 ext.206 or email me at [email protected] for more information.


Charles D’Alessandro

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2010 and Rebuilding or Protecting Your Credit Score

Saturday, January 2nd, 2010
2010 and Rebuilding or Protecting
Your Credit Score

By M. Anthony Carr

If the latest numbers on credit card delinquency are any indicator, U.S. consumers are starting to get a handle on their credit card debt. In the 3rd quarter of this year, according to data from TransUnion, a credit reporting agency, the delinquency rate dropped to 1.1 percent. The Associated press reports: “The decline is significant because of its timing. Delinquency rates usually rise in the third quarter from the prior period as people spend on summer vacations and back-to-school shopping,” said Clifton O’Neal, a TransUnion spokesman.” How you handle your debt affects your credit score and rating, which is what affects your ability to get a loan to purchase a home.

The good thing about credit scores is that they are merely a snapshot of your credit at a given time. Missed payments, high credit vs. limits, too much credit, et. al., can all be corrected and cleaned up and your credit score return to a new high level.

Tim McLaughlin, senior vice president of Weichert Financial Services, answers the question – what dings on your credit affect your score and why it seems all the good loans, seem to favor those with good credit.

The Fair Isaac Corporation maintains the most popularly used score (referred to as the FICO score) and it ranges from 300 to 850.

“There are five major ‘dings’ that impact your DCS (Decision Credit Score, or FICO score) the most,” some obvious, some not so obvious:

Maxed out credit cards: Doesn’t seem like a big

deal in the grand scheme of things, right? Oh, it is: a maxed out credit card can reduce your DCS anywhere from 10 to 45 points, according to Fair Isaac, a hefty price to pay for accumulating debt. 30 Day late mortgage payment: In addition to the late fees, this occurrence adversely impacts your DCS by 60 to 110 points … a whopping impact for being late on your mortgage.

Debt settlement: Also known as debt arbitration or debt negotiation, it is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full. The downside, a 45 to 125 point drop in your DCS.

Foreclosure: Unfortunately, an occurrence we are seeing far too often as of late. In addition to the event, it will reduce your DCS 85 to 160 points.

Bankruptcy: The event that would have the single biggest negative impact on your DCS, reducing your score 130 to 240 points; an almost irreparable event.

FICO has its own web site dealing with the scoring prices and it’s a good starting place for those trying to repair their credit rating.

Here are the three credit reporting agencies that use the FICO score:

  • Equifax (www.equifax.com)
  • TransUnion (www.TransUnion.com)
  • Experian (www.Experian.com)

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  • Will Mortgage Servicers Become the Country’s Landlords?

    Thursday, December 31st, 2009

    Will Mortgage Servicers Become the Country’s Landlords?

    Foreclosures have skyrocketed over the past two years and even more are predicted in the coming year. Not only are massive foreclosures tragic for the individual families losing their homes, but they are also responsible for major lender losses, resulting in the current mortgage credit crunch. They have caused dramatically dropping house prices, and increased crime and problems for neighborhoods where foreclosures are rampant. Banks, consumer advocate groups, and the government have been searching for ways to stem the tide of these destructive defaults.

    Enter the Deeds For Lease (D4L) program from government-controlled mortgage financier Fannie Mae. With this initiative, Fannie Mae would essentially become the landlord for seriously struggling homeowners. It is designed to “minimize family displacement, deterioration of neighborhoods caused by vandalism and theft to vacant homes, and the effect these have on families, communities and home price stabilization.” Here’s how it works:

    A homeowner with a Fannie Mae-backed mortgage facing foreclosure must contact their servicer to see if they qualify. If the homeowner does not qualify for any other home loan

    help, like mortgage modification or a short sale, then he/she may be eligible for the program. These homeowners must also be able to afford rent at the current market price. At that point the borrower turns over the home’s deed to the bank, the bank forgives the loan, and the borrower is allowed to rent the same home back from the bank for up to 12 months. During that time the renter will be expected to figure out other living arrangements so that the bank can then sell off the house.

    Will other banks follow suit in order to stop losing money on foreclosures? Not likely, according to a recent online Time article. It quoted Cheryl Lang, CEO of Integrated Mortgage Solutions, as saying the main problem lies in the legality of the program. “Once a lender takes possession, if there’s a mold issue or Chinese drywall, whatever the problem is with that house, whether or not the lender is aware of it, that’s a liability.”

    Many of the nation’s largest lenders, including Citigroup and JPMorgan Chase, have meager interest in converting homes into rentals. “We’re in the lending business,” says Chase spokesman Tom Kelly. “We’re not really equipped to be landlords.” Lenders are sitting on nearly half a million repossessed houses nationwide, but getting rid of them quickly, even if that means taking a hit on price, seems to be the preferred response. A recent presentation by the head of Chase’s retail-financial-services division showed that the company’s servicing portfolio went from having about 52,000 repossessed homes in September 2008 to only some 30,000 in September 2009. Over that period, the average price at which the firm sold houses from that stock dropped from $175,000 to $150,000.

    Now, none of that means rent-backs won’t eventually take off. There are plenty of examples in recent past of housing policies starting at the federal housing agencies and later expanding industry-wide thanks to strong-arming from some combination of the Obama administration and Congress. Loan modifications are the quintessential example. Perhaps one more relevant bit here is the law that was passed earlier this year requiring banks that repossess houses to honor the terms of existing leases (i.e. to not immediately kick out any existing renters). Fannie Mae already had such a policy in place. Over the summer, an Assistant Secretary of the Treasury Department told a Senate panel that the administration was considering rent-backs, but the idea hasn’t gained traction since then.

    After all, the big administration push has been loan modifications. Earlier this week, Treasury reported that through October more than 650,000 homeowners have received trial modifications under the government’s “Making Home Affordable” plan. How long lasting that help will be, though, is a different question. As of Sept. 1, only 1,711 borrowers had successfully completed the trial phase and received permanent changes to their loan terms, according to a report by the Congressional Oversight Panel.

    If loan modifications aren’t the long-term success the administration is banking on, people will wind up losing their homes to foreclosure anyway, and the number of repossessed properties owned by banks will again rise. According to foreclosure tracker RealtyTrac, the number of foreclosure notices nationwide has been ticking down the past three months, but the number of notices is still running about 19 percent higher than last year. Considering high unemployment and how many people still owe more on their mortgages than their houses are worth, there might be a chance yet for attention to turn to the idea of renting houses back to former owners.

    Navigating Short Sales: What to Do When the Sale Price Leaves You Short

    Tuesday, December 29th, 2009


    If you’re thinking of selling your Brooklyn home, and you expect that the total amount you owe on your mortgage will be greater than the selling price of your home, you may be facing a short sale. A short sale is one where the net proceeds from the sale won’t cover your total mortgage obligation and closing costs, and you don’t have other sources of money to cover the deficiency. A short sale is different from a foreclosure, which is when your lender takes title of your home through a lengthy legal process and then sells it.

    1. Consider loan modification first. If you are thinking of selling your home because of financial difficulties and you anticipate a short sale, first contact your lender to see if it has any programs to help you stay in your home. Your lender may agree to a modification such as:

    · Refinancing your loan at a lower interest rate

    · Providing a different payment plan to help you get caught up

    · Providing a forbearance period if your situation is temporary

    When a loan modification still isn’t enough to relieve your financial problems, a short sale could be your best option if

    · Your property is worth less than the total mortgage you owe on it.

    · You have a financial hardship, such as a job loss or major medical bills.

    · You have contacted your lender and it is willing to entertain a short sale.

    2. Hire a qualified team. The first step to a short sale is to hire a qualified real estate professional* and a real estate attorney who specialize in short sales. Interview at least three candidates for each and look for prior short-sale experience. Short sales have proliferated only in the last few years, so it may be hard to find practitioners who have closed a lot of short sales. You want to work with those who demonstrate a thorough working knowledge of the short-sale process and who won’t try to take advantage of your situation or pressure you to do something that isn’t in your best interest.

    A qualified real estate professional can:

    · Provide you with a comparative market analysis (CMA) or broker price opinion (BPO).

    · Help you set an appropriate listing price for your home, market the home, and get it sold.

    · Put special language in the MLS that indicates your home is a short sale and that lender approval is needed (all MLSs permit, and some now require, that the short-sale status be disclosed to potential buyers).

    · Ease the process of working with your lender or lenders.

    · Negotiate the contract with the buyers.

    · Help you put together the short-sale package to send to your lender (or lenders, if you have more than one mortgage) for approval. You can’t sell your home without your lender and any other lien holders agreeing to the sale and releasing the lien so that the buyers can get clear title.

    3. Begin gathering documentation before any offers come in. Your lender will give you a list of documents it requires to consider a short sale. The short-sale “package” that accompanies any offer typically must include

    · A hardship letter detailing your financial situation and why you need the short sale

    · A copy of the purchase contract and listing agreement

    · Proof of your income and assets

    · Copies of your federal income tax returns for the past two years

    4. Prepare buyers for a lengthy waiting period. Even if you’re well organized and have all the documents in place, be prepared for a long process. Waiting for your lender’s review of the short-sale package can take several weeks to months. Some experts say:

    · If you have only one mortgage, the review can take about two months.

    · With a first and second mortgage with the same lender, the review can take about three months.

    · With two or more mortgages with different lenders, it can take four months or longer.

    When the bank does respond, it can approve the short sale, make a counteroffer, or deny the short sale. The last two actions can lengthen the process or put you back at square one. (Your real estate attorney and real estate professional, with your authorization, can work your lender’s loss mitigation department on your behalf to prepare the proper documentation and speed the process along.)

    5. Don’t expect a short sale to solve your financial problems. Even if your lender does approve the short sale, it may not be the end of all your financial woes. Here are some things to keep in mind:

    · You may be asked by your lender to sign a promissory note agreeing to pay back the amount of your loan not paid off by the short sale. If your financial hardship is permanent and you can’t pay back the balance, talk with your real estate attorney about your options.

    · Any amount of your mortgage that is forgiven by your lender is typically considered income, and you may have to pay taxes on that amount. Under a temporary measure passed in 2007, the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act, homeowners can exclude debt forgiveness on their federal tax returns from income for loans discharged in calendar years 2007 through 2012. Be sure to consult your real estate attorney and your accountant to see whether you qualify.

    · Having a portion of your debt forgiven may have an adverse effect on your credit score. However, a short sale will impact your credit score less than foreclosure and bankruptcy.

    Note: This article provides general information only. Information is not provided as advice for a specific matter. Laws vary from state to state. For advice on a specific matter, consult your attorney or CPA.


    Charles D’Alessandro
    Fillmore Real Estate
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    Freddie sees mortgage rates hitting 6% in 2010

    Saturday, December 26th, 2009

    Freddie sees mortgage rates hitting 6% in 2010

    The average rate on a 30-year, fixed-rate mortgage rose to 5.05 percent this week after hitting an all-time low earlier this month.

    The average rate on a 30-year, fixed-rate mortgage rose to 5.05 percent this week after hitting an all-time low earlier this month. (Tim Rue/bloomberg News)

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    Who’s Blogging

    Washington Post Staff Writer
    Saturday, December 26, 2009

    After hitting an all-time low in early December, the average rate on a 30-year, fixed-rate mortgage rose to 5.05 percent this week and could climb to 6 percent by the end of 2010, if not sooner, according to giant mortgage financier Freddie Mac.

    The results are noteworthy because rates have not topped 5 percent since the last week of October, when they reached 5.03 percent, based on the results of this closely watched survey, which polls lenders during the first three days of every week.

    Many firms regularly track interest rates and come up with slightly different numbers because they survey different lenders at different times of the day or week. But several have reported the upward trend in recent weeks. They attribute it in part to the effects of the holiday season, when demand for buying and refinancing homes dies down and financial markets coast through the end of the year.

    “However, this is also a glimpse of what we’re going to see in 2010,” said Greg McBride, a senior financial analyst at Bankrate.com, a personal finance Web site.

    The key catalyst for interest rates going forward will be the end of a Federal Reserve program that buys a sizable chunk of mortgage-backed securities issued by firms such as Fannie Mae and Freddie Mac. That program succeeded in immediately pushing mortgage rates well below the 6 percent mark when it was announced last year.

    But the Fed has committed to winding down the program by March. The central bank is betting that by gradually tapering its purchases, private buyers of mortgage-backed securities, who have largely been absent from the market, will return and rates won’t rise much.

    But Amy Crews Cutts, deputy chief economist at Freddie Mac, said interest rates are bound to rise to 6 percent by the end of 2010 because private buyers will demand a higher rate of return on the securities than the Fed did. Lenders may have to raise the rates they charge to consumers in order to make that happen.

    “Extraordinary resources have been put into keeping the rates down and supporting the mortgage markets and it’s hard to imagine that the rates can go much lower than they are,” Crews Cutts said. “Anything we get at or below 5 percent is a gift at this point.”

    This week’s Freddie Mac survey found that the 5.05 percent average on 30-year fixed-rate loans (with an average 0.7 point) was up from 4.94 percent the previous week but down from 5.14 percent at the same time last year. The all-time weekly low since the firm started tracking the numbers in 1971 was in the first week of December, when rates fell to 4.71 percent.

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    Many borrowers have not been able to secure the best rates because they lack the stellar credit scores and hefty down payments that many lenders now demand. Some who have tried to refinance have not been able to qualify because their home prices have plummeted to the point where they now owe more on their mortgages than their homes are worth.

    But anyone who can secure a loan should not wait much longer, especially if they are looking to refinance, McBride said. Homeowners are more sensitive to interest rates when they refinance than when they buy a home.

    “The difference between 5 percent and 5.5 percent could mean the difference between refinancing or not,” he said.

    But the interest rate is less critical to people who want to buy a home, McBride said. In that case, price and affordability should trump interest rates.

    The general rule of thumb is that your monthly mortgage payment (property taxes and insurance included) should not exceed 28 percent of gross pay. All your loans combined — mortgage, car, credit card, student debt — should not exceed 36 percent.

    “Yes, a higher mortgage rate would steal some buying power, but it doesn’t price buyers out of the market entirely because 6 percent is still pretty low,” McBride said. “If you can’t afford the house with rates at 6 percent, you can’t afford the house.”


    Charles D’Alessandro
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    Saving Foreclosures in Brooklyn New York with New Fannie Mae Program

    Sunday, December 6th, 2009

    As the number of foreclosures rise around the nation, some lenders have held their foreclosures in Brooklyn in private stock, hoping to sell them gradually in a stabilizing real estate market. That hope has slowly dwindled, however, even with the five-month extension on home buying tax credits signed by the President November 6th of this year.

    Government-owned Fannie Mae may have come up with a solution.

    Deed-in-Lieu

    Some homeowners facing foreclosures in Brooklyn have more than foreclosure, loan modification or short sale options. Some qualify for a deed-in-lieu (DIL), where they sign away all their equity back to the lender and walk away “debt free” (except, possibly, for taxes). Unfortunately, a DIL leaves the homeowner without a home to live in, and the lender with a house to sell in an uncertain market.

    Deed for Lease Program

    Under Fannie Mae’s new Deed for Lease Program (D4L), those who go through the DIL process may be eligible to rent their home back from Fannie Mae at current market rental rates. This may not sound like a great deal, but many families have ended up on the street because of foreclosure. Those who qualify for the D4L Program will be able to remain in their homes for at least 12 months. To learn more, read the entire D4L Program eligibility list.  Here are a few of the qualifications:

    • No prohibitive Homeowner’s Association rental limitations
    • The cost of any required repairs is an acceptable amount, based on the value of the property
    • The income the lender receives from the current rental market should be expected to cover any maintenance/management costs
    • The current rental rates must be less than 31% of your gross income
    • The home must be a primary residence

    Whether the D4L Program will help or hinder the number of foreclosures in Brooklyn New York is still up in the air, but it does give homeowners other options – something they’ve been sorely lacking.

    If you’re facing foreclosure and qualify for short sale, I’d love to help. Call me Charles D’Alessandro with Fillmore Real Estate, at (718) 253-9600 ext 206 or email me at [email protected] for more information.


    FHA On Solid Ground: Hope for Brooklyn Real Estate Owners

    Wednesday, December 2nd, 2009

    A recent interview with FHA commissioner David Stevens on CNBC gives hope to Brooklyn real estate owners with FHA loans. The Federal Housing Administration now covers at least 30% of new home loans, so when Stevens announced that it might not make its 2% capital reserve, people were understandably nervous. For no reason, Stevens says in the CNBC interview.

    Instead of immediate risk management in the form of strict guidelines that might make it harder on potential Brooklyn real estate owners, such as those Fannie Mae and Freddie Mac have put on condo mortgages, the FHA is going for some changes. The changes include hiring a chief risk officer and requiring higher capital standards for loan originators.

    Once it was out that the FHA wouldn’t meet its 2% (please note that the FHA itself is the one who broke the news), news portals, blogs and other websites spread the news that the FHA was a train wreck. However, the CNBC interview with Stevens cleared the air a bit.

    It appears that the FHA, put in place for instances like this when people can’t afford other loans, actually has two capital accounts. According to Stevens, the FHA has “lots of capital in primary reserve to cover expected defaults.” Combined, FHA capital is over $30 billion dollars.

    At the present, says Stevens, the FHA isn’t considering a minimum credit score, and they may not have to. Looking at their portfolio, the average credit score has gone up 60 points, from 630 to 690, pointing to a higher quality of borrowers.

    So, when thinking about buying Brooklyn real estate and looking at mortgage companies, don’t forget to look at the FHA. If Fannie Mae and Freddie Mac are lending, the FHA is – and it’s going strong!

    You can watch the CNBC video for the full interview.

    If you’re looking for a beautiful home, I can help. Call me Charles D’Alessandro at Fillmore Real Estate now at (718) 253-9600 ext. 206 or email me at [email protected] for more information.

    brought to you by Brooklyn Real Estate Sales


    More Important Information On The Home Buyers Tax Credit!

    Saturday, November 14th, 2009
    he Tax Guy by Bill Bischoff (Author Archive)

    Published by Smart Money.com

    Home Buyer Tax Credit: 10 Things to Know

    On Nov. 6, the president signed the new Worker, Homeownership, and Business Assistance Act of 2009 into law. The centerpiece of this legislation is the extension and liberalization of what is now inaccurately called the first-time home buyer credit.

    Here are the 10 most important things to know about the revamped credit.

    1. New purchase deadline extends into 2010

    The home buyer credit was previously scheduled to expire on Nov. 30, 2009. The new law extends the deal to cover purchases of U.S. principal residences that close by April 30, 2010. However, if a home is under contract on that date, the deadline for closing is extended to June 30, 2010.

    2. Existing homeowners can now qualify

    The new law allows a reduced credit for existing homeowners who buy a replacement U.S. principal residence after Nov. 6, 2009. The credit equals the lesser of: (1) $6,500, or (2) 10% of the price of the replacement home, or (3) $3,250 for a buyer who uses married filing separate status. The new existing-homeowner credit is only available for purchases that close after Nov. 6, 2009. To qualify, the buyer must have owned and used the same home as a principal residence for at least five consecutive years during the eight-year period ending on the purchase date for the replacement principal residence. If you’re married, your spouse must pass this test too (whether or not you file jointly).

    3. Larger credits still allowed for first-time buyers

    Before the new law, the home buyer credit was only available to so-called first-time buyers, which means someone who had not owned a U.S. principal residence during the three-year period ending on the purchase date for a home that will serve as the buyer’s new principal residence. If you’re married, both you and your spouse must pass the three-year test (whether or not you file jointly). These first-time home buyer rules still apply for purposes of claiming a larger credit of up to $8,000. Specifically, the credit for a first-time buyer still equals the lesser of: (1) $8,000, or (2) 10% of the home purchase price, or (3) $4,000 if you use married filing separate status.

    4. Higher-income folks can now qualify

    The home buyer credit is phased out (reduced or completely eliminated) as income goes up. However, the new law significantly raises the phase-out ranges so that many more higher-income buyers will now qualify.

    * For purchases after Nov. 6, 2009, the phase-out range for unmarried individuals and married folks who file separately is between modified adjusted gross income (MAGI) of $125,000 and $145,000 (way up from the old-law range of $75,000-$95,000).

    * The phase-out range for married joint filers is now between MAGI of $225,000 and $245,000 (way up from the previous range of $150,000-$170,000).

    5. New $800,000 purchase price limit

    For purchases after Nov. 6, 2009, the credit can only be claimed for a principal residence that costs $800,000 or less. So if your new home costs $800,001, the credit is completely off limits (but I doubt too many people will feel sorry for you).

    6. No more credits for kids or dependents

    For purchases after Nov. 6, 2009, the home buyer must be at least 18 years old on the purchase date to qualify for the credit. Also, no credit is allowed for a buyer who can be claimed as a dependent on someone else’s Form 1040 for the year of the purchase. These new rules are intended to shut down the practice of claiming the credit for youngish buyers who really don’t even have incomes of their own (like college students who use money from their parents to buy a pad near campus).

    7. New anti-fraud rules

    A recent government report said the IRS has already identified over 100,000 returns with potentially fraudulent home buyer credits. This is hardly surprising when the government is willing to give away up to $8,000 in free money to anyone who files a return, even when that person reports no income. Believe it or not, absolutely no documentation was required to claim the credit, until now. For credits claimed on 2009 and 2010 returns, buyers must attach a properly executed real estate settlement sheet to the return. Also, the IRS can now simply disallow credits in fishy circumstances (like when it appears the $8,000 credit is being claimed by someone who already owns a home).

    8. Credits can still be claimed on prior-year returns

    Under the revamped rules, you can still claim the credit for a 2009 purchase on your 2008 return (although you would now generally have to file an amended return to do so). You can also claim the credit for a 2010 purchase on your 2009 Form 1040. This allows you to cash in on the credit sooner rather than later, and it may also allow you to claim a larger credit if your income in the year of purchase is higher than in the preceding year.

    9. Credits must still be repaid in some cases

    Under old-law rules for homes purchased between April 9, 2008 and Dec. 31, 2008, buyers are generally required to repay the credit over 15 years. However, this repayment rule is generally eliminated for purchases after 2008. That said, you might still have to repay the credit if you sell your home within three years of the purchase date or stop using it as your principal residence during that period.

    10. Special rules for military service members

    For military service members on extended duty outside the U.S., the new law lengthens the deadline for closing on home purchases for an extra year, to April 30, 2011 (or June 30, 2011 for homes under contract on April 30, 2011). The new law also waives the credit repayment rules for service members who are forced to move due to receiving new orders. The same special rules apply to members of the foreign service and intelligence communities.

    Brought to you by Charles D’Alessandro of Fillmore Real Estate

    To learn more about me and how I can help you achieve your real estate goals, read my Brooklyn Real Estate newsletter

    Buying A Fixer Upper In Brooklyn? How About The 203k Rehabilitation Mortgage Insurance ?

    Saturday, October 31st, 2009

    What is A 203k Rehabilitaion Mortgage?

    Shopping for a Brooklyn home isn’t always so easy. After you go to a lender to learn how much of a mortgage you qualify for then research the Brooklyn neighborhood and maybe school district you would like to live in.

    Now it’s time to find a Realtor to show you houses. As you look around at the houses that are for sale you find some are too big, too small ,not the right street, just right but I hate the kitchen or  the property is in total disrepair, sound familiar to anyone? Well for the Brooklyn house that is in disrepair there is an answer. 203k Rehabilitation Mortgage Insurance, this mortgage Section 203(k) fills a unique and important need for home buyers.

    When buying a house that needs repair or modernization, home buyers usually have to follow a complicated and costly process. The interim acquisition and improvement loans often have relatively high interest rates, short repayment terms and a balloon payment. However, Section 203(k) offers a solution that helps both borrowers and lenders, insuring a single, long term, fixed or adjustable rate loan that covers both the acquisition and rehabilitation of a property. Section 203(k) insured loans save borrowers time and money. They also protect the lender by allowing them to have the loan insured even before the condition and value of the Brooklyn property may offer adequate security.

    This option allows you to buy the handyman special and borrow the repair money needed to get the house renovated.  Now it does have a process and requirements but it’s a great way to get that perfect ugly duckling to what you want it to be. For the houses that might just need a little sprucing up like kitchens and baths there is  another option called FHA’s Streamlined 203(k) program permits home buyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this new product, home buyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser.

    This program is not for everyone it can be time consuming with a lot of involvement, the program is just another option to explore and an example of  the great mortgage programs out there to help buyers and sellers to achieve their goal, Remember research is a top priority. Always do you homework !

    If you’re ready to buy a fixer upper or would like to know more about the 203k Rehabilitation Mortgage call me  Charles D’Alessandro Your Brooklyn Realtor® with Fillmore Real Estate a call today at (718) 253-9600 ext 206 or email me at [email protected]