Legislators today voted to extend the $8,000.00 first time home buyer credit. Many say that the credit is responsible for the spike in the local real estate market while others criticize it as not being enough of an effort to stimulate the economy.
The President is expected to sign the extension making the credit available to first time home buyers through June 2010. The program has also been expanded to benefit certain home owners who will be buying again within the credit period. Income caps have also been increased along with the purchase price cap. You can read more about the specifics of the extension here.
The United States Senate leadership amended a proposition to substitute an expiring $8,000 first-time home buyer tax credit, extending the credit to higher-income borrowers and to others who already own real estate, according to Bloomberg.
The program would extend the revised credit to April 30, 2010. It will also make the credit available to homeowners and buyers earning up to $125,000, or $225,000 for couples, this is an increase from $75,000 for individuals and $150,000 for couples available current available.
Enacted in 1994 “The Good Funds Statute” addressed the situation that first arose in the Abbey Financial case, where a lender failed to fund a loan which had already closed, the closing attorney was left in the difficult position of either having closed the loan and refusing to record the papers or having recorded the deed and mortgage and not having the funds to pay off the seller and existing liens. In the case of Abbey Financial, several of the attorneys representing Abbey closed the loan and recorded the papers, including the mortgage, without having the necessary funds to payoff the seller or the existing liens.
The Good Funds Statute M.G.L. c.183, § 63b provides that no mortgagee who makes a loan to be secured by a mortgage, shall cause a mortgage to be recorded with the Registry of Deeds unless prior to the time the mortgage is recorded, the mortgagee has caused the full amount of the proceeds of such loan due to the mortgagor, the mortgagor’s attorney or the mortgagee’s attorney in the form of a certified check, bank treasurer’s check, cashier’s check or transfer of funds. The statute further provides that neither the mortgagor’s attorney or the mortgagee’s attorney shall be required to make disbursements or deliver said proceeds to the mortgagor in such form. The primary purpose of the “Good Funds” statute was to allow consumers and conveyancers to rely on funds at a closing.
The information on this page pertains to the American Recovery and Reinvestment Act of 2009.
The tax credit is for first-time home buyers only.
For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
The tax credit does not have to be repaid.
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
For the first time in more than 30 years, the U.S. Department of Housing and Urban Development has issued long-anticipated mortgage reforms that will help consumers to shop for the lowest cost mortgage and avoid costly and potentially harmful loan offers. HUD will require, for the first time ever, that lenders and mortgage brokers provide consumers with a standard Good Faith Estimate (GFE) that clearly discloses key loan terms and closing costs. HUD estimates its new regulation will save consumers nearly $700 at the closing table.
