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Where homeownership education takes flight!
A Complete Guide to the Extended and Expanded Homebuyer Tax Credit
Thank you for attending
We will begin in a momentClass Scheduled to begin at 6:00pm
Presented by
Scott SchangBranch Manager
Broadview Mortgage Corporation1-866-667-6724
Where homeownership education takes flight!
Homebuyer Tax Credit Update
Topics We Will Cover In This Class
• What’s New with the Extended and Expanded Credit
• What Hasn’t Changed – Qualifying Guidelines
• Expectation management
• Wrap up and Take Aways
Where homeownership education takes flight!
Homebuyer Tax Credit Update
Answering all your Questions• You may type questions in at any time during the
presentation – Questions Box on your screen
• Home Buying experts are available to answer questions throughout presentation
• This is an interactive learning environment. You will get the most value by having your specific questions answered
• The only dumb question is the one you don’t ask
Write number down now in case you get disconnected
1-866-667-6724
Where homeownership education takes flight!
Homebuyer Tax Credit Update
Tax Credit Extension
Where homeownership education takes flight!
Homebuyer Tax Credit Update
• Changes apply to qualified buyers that complete the purchase between November 6th, 2009 and April 30th, 2010.
• Exception in Case of Binding Contract– In the case of any taxpayer who enters into a
written binding contract before May 1st, 2010 (in contract by April 30th), to close on the purchase of a principal residence July 1st, 2010 before (close on June 30th) will be eligible.
• Special Rules for Members of the Armed Forces– Individuals that serve on official duty outside U.S.
for 90 days during period after 12/21/08, and ending before May 1, 2010 – Extends 1 Year
– In contract May 1, 2011 / Close by June 1, 2011
Where homeownership education takes flight!
Homebuyer Tax Credit Update
Income Limitations
Where homeownership education takes flight!
Homebuyer Tax Credit Update
The Old Income Limitations
• Single filing status - $75,000 – Eligible for full credit– Phase out begins when MAGI exceeds limit – reduce credit
• Phase out at $95,000
• Married filing joint - $150,000 – Eligible for full credit– Phase out begins when MAGI exceeds limit – reduce credit
• Phase out at $195,000
• Occupying home as Joint Tenants– If you purchase home under joint tenancy and down
payment and ownership are not equal• Tax credit will be claimed in proportion to ownership in
residence
Where homeownership education takes flight!
Homebuyer Tax Credit Update
The New Income Limitations
• Single filing status - $150,000– MAGI – Marginal Adjusted Gross Income – What
you pay taxes on– No mention of a “phase out” as in previous
version
• Married filing joint - $225,000– MAGI – Marginal Adjusted Gross Income – What
you pay taxes on– No mention of a “phase out” as in previous
version
Where homeownership education takes flight!
Homebuyer Tax Credit Update
Maximum Purchase Price
Where homeownership education takes flight!
Homebuyer Tax Credit Update
• Limitation Based on Purchase Price– No credit shall be allowed for the purchase of
any residence if the purchase price of such residence exceeds $800,000
Where homeownership education takes flight!
Homebuyer Tax Credit Update
Previous Home Owner
Where homeownership education takes flight!
Homebuyer Tax Credit Update
Special Rule for Long-Time Residents of Same Principal Residence
• $6,500 for single and joint tax payers– $3,250 for married filing separate
• In the case of an individual (and, if married, such individual’s spouse) who has owned and used the same residence as such individual’s principal residence for any 5–consecutive-year period during the 8 year period ending on the date of the purchase of a subsequent principal residence, such individual shall be treated as a first-time homebuyer for purposes of this section with respect to the purchase of such subsequent residence
Where homeownership education takes flight!
Homebuyer Tax Credit Update
Special Rule for Long-Time Residents of Same Principal Residence
• Plain English Explanation – sort of….
• You must have lived in your home for at least the 5 consecutive years
• The 5 years will start counting 8 years back from the date of the close of escrow on your new home
• NOTE: The challenge here is the 5 consecutive years. If you have not owned a “main home” in the past 3 years – you qualify as a First Time Buyer
Where homeownership education takes flight!
Homebuyer Tax Credit Update
Fraud Prevention
Where homeownership education takes flight!
Homebuyer Tax Credit Update
• Age Limits – No credit shall be allowed for taxpayer under 18 years old– Exception If taxpayer is married and spouse is at least 18
• Documentation Requirements – Copy of the HUD-1 Settlement Statement must be attached
Where homeownership education takes flight!
Homebuyer Tax Credit Update
What Hasn’t Changed
Where homeownership education takes flight!
Homebuyer Tax Credit Update
Qualifying Guidelines
• 10% of the Purchase Price up to $8,000 for single and joint taxpayers
• Married filing separate may claim $4,000
• Not paid back – No recapture if home is lived in as main home for at least 3 years
• Purchase loans using Mortgage Revenue Bonds are eligible for Homebuyer Credit - CalHFA
Where homeownership education takes flight!
Homebuyer Tax Credit Update
Occupancy and Property Type• Must purchase a “main home” – Primary residence
– Main home - Your main home is the one you live in most of the time. It can be a house, houseboat, housetrailer, cooperative apartment, condominium, or other type of residence
– New construction – Purchase date treated as first date you occupy home
• Must be a First Time Homebuyer - $8,000– Can not have owned another primary home within 3 years
of the closing date of new home– May own other homes or properties as long as you have
never lived in it as your main home
Where homeownership education takes flight!
Homebuyer Tax Credit Update
Tax Credit Restrictions – Do Not Qualify if…
• You acquired your home through gift or inheritance
• You acquired your home from a related person:– Spouse, ancestors (parents, grandparents,etc.)– Lineal descendants (children, grandchildren, etc.)– A corporation in which you directly or indirectly
own more than 50% in value of the outstanding stock of the corporation.
– A partnership in which you directly or indirectly own more than 50% of the capital interest or profits interest
– NEW: Spouses parents or siblings
Where homeownership education takes flight!
Homebuyer Tax Credit Update
Claiming the First Time Homebuyer Credit• IRS Form 5405 – Attached to 1040
• A main home purchased in 2009 and is eligible for tax credit may be claimed on 2008 (or amended 2008) or 2009 tax return
• A home purchased in 2010 may be claimed on 2010 or amended 2009 tax return
• You may adjust your W4 withholdings in anticipation of claiming credit on 2010 tax return
Where homeownership education takes flight!
Homebuyer Tax Credit Update
Expectation Management & Speculation• Housing inventory remains low – No signs of “flood”
of foreclosures onto market
• Expect this level of competition and steady to rising home prices at least while credit is available
• Home prices inflated due to demand from tax credit
• Important timelines if you plan to purchase for 2009 tax year– Should be in escrow before Monday, November 23rd, 2009– Title companies, lenders closed 26th & 27th of Nov.– Title companies, lenders closed 24th & 25th of Dec.– Many appraisers, inspectors, professionals wind down
during holiday season prolonging turn times for services
Last shot at tax credit – No more extensions!
Where homeownership education takes flight!
Homebuyer Tax Credit Update
Wrap Up and Take Aways• We are a direct Lender that specializes in CalSTRS,
CalPERS, CalHFA, FHA, VA, USDA and Community based down payment assistance programs
• Our “turn times” are under 30 days to close
• We would love the opportunity to be your lender if you have not already chosen one
• We are more than happy to be your “second opinion” if you are already working with someone
• We can recommend a qualified Real Estate Agent in your area that shares our values and expertise
• We are committed to educating and empowering homeowners - Please join us for other classes
Where homeownership education takes flight!
Thank You for AttendingIf you enjoyed this class – Tell a friend
Please tell us how we’re doingThank You email includes a link to “Praise” page
Your feedback is greatly appreciated
For more information
1-866-667-6724Homeownership Educator
Scott SchangBranch Manager
Broadview Mortgage Corporation