There is good news and bad news about the Federal Housing Extended Homebuyer Tax Credit.
First, the Good News. The $8000 tax credit for first time buyers has been extended until April 30, 2010. More good news is that existing homeowners who have occupied their present home for 5 consecutive years in the last 8 years, can qualify for up to $6500 as a tax credit to apply to the purchase of a new home.
So, now the Bad News. You may be aware that FHA makes the money available for the majority of mortages these days. This is because the credit guidelines are not as strict as conventional financing and the down payment requirement is 3.5% vs. 5% or 10% required by conventional lenders.
The FHA’s reserves have been severely depleted and have fallen below what the government requires. A recent CNN article Cash Cushion Shrivels U.S. Housing Agency discusses this in great detail. Without some sort of infusion of cash, the FHA may be forced to make changes to the current lending criteria by requiring higher credit scores and larger down payments of 10% down. This would serve to keep buyers out of the game who are presently qualified and who have the requisite 3.5% down payment.
So what does this mean? It means buyers who’ve been sitting on the fence thinking they can wait out the market to get a “good deal” could end up pushing themselves out of the market if they don’t make a decision to buy soon and before FHA makes any changes. They should also understand that this is the LAST extension of the tax credit. There will not be any more after this expires in April 2010.
Time is of the essence. Act now!
Deb Orth
Licensed Virginia Realtor
Keller Williams Realty
7231 Forest Avenue
Richmond, VA 23226
804 314-4575
www.RichmondHomes4You.com
Deb@RichmondHomes4You.com
The FHA’s reserves have been severely depleted and have fallen below what the government requires. A recent CNN article Cash Cushion Shrivels U.S. Housing Agency discusses this in great detail. Without some sort of infusion of cash, the FHA may be forced to make changes to the current lending criteria by requiring higher credit scores and larger down payments of 10% down. This would serve to keep buyers out of the game who are presently qualified and who have the requisite 3.5% down payment.
So what does this mean? It means buyers who’ve been sitting on the fence thinking they can wait out the market to get a “good deal” could end up pushing themselves out of the market if they don’t make a decision to buy soon and before FHA makes any changes. They should also understand that this is the LAST extension of the tax credit. There will not be any more after this expires in April 2010.
Time is of the essence. Act now!
Deb Orth
Licensed Virginia Realtor
Keller Williams Realty
7231 Forest Avenue
Richmond, VA 23226
804 314-4575
www.RichmondHomes4You.com
Deb@RichmondHomes4You.com
