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mbartels
120 Posts |
 Posted - 11/06/2009 : 10:38:17 AM
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I can't seem to find out if somebody building a house would be eligible for the move up credit or not. I have a friend that wants to know ASAP so he can break ground soon enough to have the house finished by June 30.
This could get confusing. If he buys land for $50,000 now but gets a constrution loan he is never really purchasing a house - he's purchasing vacant land and hiring someobdy to build him a house. How does that work? |
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Broker227
400 Posts |
Posted - 11/06/2009 : 10:39:49 AM
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| first off, has he lived in his previous house for 5 years as a primary residence? |
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mbartels
120 Posts |
Posted - 11/06/2009 : 11:17:05 AM
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| Yes. We've got that part covered. |
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nowbroker
2586 Posts |
Posted - 11/06/2009 : 11:56:13 AM
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The specific IRS form is not out yet since the tax credit does not go into effect until Monday, but I would say the answer is when the borrower first occupies the home as their primary residence is the date that will be used.
Look at the wording in the IRS form 5405 (lower left side) that gives this answer for those building a new home:
http://www.irs.gov/pub/irs-pdf/f5405.pdf |
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cindyhulett
589 Posts |
Posted - 11/06/2009 : 12:34:04 PM
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| With this kind of incentive, borrowers that are upside down on their current mortgages can buy a another home, and what? Let the other go? |
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celloshred
2864 Posts |
Posted - 11/06/2009 : 12:39:20 PM
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| the obviously have to qualify for the financing. |
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StevieV22
283 Posts |
Posted - 11/06/2009 : 1:32:58 PM
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If I have one borrower that is first time buyer but other has been at his place 5 years and they want to move up, can they collect on first time buyer and the $6,500?
I assume no since it's per household, but still curious. |
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homebroker@sbcgl
7361 Posts |
Posted - 11/06/2009 : 1:40:50 PM
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I believe a short sale or deed in lieu would make them qualify?
quote:
Originally posted by cindyhulett
With this kind of incentive, borrowers that are upside down on their current mortgages can buy a another home, and what? Let the other go?
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tropixman
362 Posts |
Posted - 11/06/2009 : 3:47:18 PM
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| How many people will qualify with the tighter guidelines and the "BUY AND BAIL" restrictions??? |
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peter
6465 Posts |
Posted - 11/06/2009 : 7:40:13 PM
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Is this $6,500 applicable to the existing homeowner who moves up
only? Or is it application to those who want to downsize into
lower value homes?
Anyone has studied the details, please advise. Thanks.
Peter |
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Mandyvilla
6392 Posts |
Posted - 11/07/2009 : 05:58:32 AM
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I had a long talk w/ an accountant about these credits. Besides telling me most will be audited, if a couple buys a home and one is a first time buyer, they cannot take the credit, even if they file separate this year, because they have filed jointly while one owned the other property. He said even if they have always filed separately, they still may not be eligible for the credit.
Also, amended tax returns being filed are at an all time high. Those are reviewed by hand, and he said, they are reviewed again the year after the amended return, looking for discrepancies.
I have also been told (not by him, but another financial expert) that a co-signed mortgage (where the co-signer is a homeowner) is not eligible for the credit.
The one thing I have heard and can confirm, the IRS has announced the FTHB tax credits will be reviewed (audited) unlike any prior incentive ever offered. Be careful about the advice you give buyers, other than to consult a tax professional. We are still perceived to be the rich mortgage bankers with deep pockets.
From the sound of things, we are about to see an aggressive IRS of days past. Just what we need, huh? |
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mbartels
120 Posts |
Posted - 11/07/2009 : 11:01:02 AM
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| I am not saying you are wrong but I am not convinced that a co-signed mortgage in not eligible. I personally have done 5 or 6 loans with co-signers. I'd feel sick to my stomach if they didn't get the $8000! |
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nowbroker
2586 Posts |
Posted - 11/07/2009 : 2:19:03 PM
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quote:
Is this $6,500 applicable to the existing homeowner who moves up
only? Or is it application to those who want to downsize into
lower value homes?
Anyone has studied the details, please advise. Thanks.
Peter
Yes, the home can be higher or lower in value.
Reference source:
http://www.realtor.org/wps/wcm/connect/d336a1804033a163816af5205f470b6e/government_affairs_tax_credit_FAQs_110509.pdf?MOD=AJPERES&CACHEID=d336a1804033a163816af5205f470b6e
quote:
I am not saying you are wrong but I am not convinced that a co-signed mortgage in not eligible. I personally have done 5 or 6 loans with co-signers. I'd feel sick to my stomach if they didn't get the $8000!
You are correct, Mandyville I believe was speaking of a married couple, in this case if EITHER person had a home they cannot get the tax credit.
In the situation that the borrowers (single or married) and are first time buyers, and they have a non occupant co-borrower like a parent, this is fine.
Reference question S2 on this page:
http://www.irs.gov/newsroom/article/0,,id=206294,00.html |
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peter
6465 Posts |
Posted - 11/07/2009 : 6:53:22 PM
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Nowbroker wrote:
"Yes, the home can be higher or lower in value."
There is a good market for babyboomers who are retiring
and downsizing, i.e. California to Arizona or Nevada.
Or New York/Boston to Florida.
The downsizing market is active while the upgrade market
is very limited now.
These incentives will help the purchase business to renew
its strength among sectors where rising unemployment is not
a current problem, i.e. nurses and medical professionals.
Peter
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