The Tax Credit Extension for Homebuyers is Official!

Obama has officially signed the bill that extends the first time homebuyer tax credit of up to $8,000 through June 2010 as long as the homebuyer executes a contract by April 30, 2010. This new legislation expands the tax credit program to include an up to $6,500 tax credit for existing homeowners who buy another home as long as they have lived in their current residence 5 years or more.

The bill caps the eligibility for the credit to homes costing less than $800,000 and raises the current income limit from $75,000 per year for a single person or $150,000 per year for a couple filing jointly to $125,000/single and $225,000/jointly.

For all future homebuyers that have been waiting for this, visit www.bwhometeam.com for all your homebuying needs!

Customer Satisfaction of New Home Construction Gains Ground

I read an interesting article on CNNMoney this morning that should be of some interest to anyone considering purchasing a new construction home this year, especially those interested in taking advantage of the $8000 first time homebuyer tax credit. According to the 2009 J.D. Powers and Associates U.S. New Homebuilder Satisfaction Study, although less new construction homes are being built, overall customer satisfaction increased for the second year in a row, up 32 points to 811 on a 1,000 point scale. Fierce competition amongst builders has lead to benefit for home buyers. Only the strongest builders have survived and they have survived by offering better home construction quality, more upgrades, and functional floorplans all at a discount from previous years. Also, of special interest to first time homebuyers, there are many homes at the finish out stage or almost there, that can be closed on by the November 30th deadline to qualify for the new homebuyer tax credit. To read more, click here.

Darling Homes tops the builder satisfaction study for the Dallas/Fort Worth area. Drees Homes and Ashton Woods homes follow Darling in the number two and three spots.

Looking for a new construction home? Visit our website's new construction home search for the Dallas and Fort Worth area! See floorplans, community information, and many homes that you won't find on the MLS.

Top Dallas/Fort Worth home builders
Based on 2009 survey of consumer satisfaction with 1,000 being a perfect score:

1. Darling Homes 876
2. Drees Custom Homes 865
3. Ashton Woods 864
4. Pulte Homes 860
5. Standard Pacific Homes 858
6. David Weekley Homes 850
7. Highland Homes 849
8. Horizon Homes 836
9. Ryland Homes 816
10.K Hovnanian 813
11. Del Webb 811
D-FW average 809
12. Lennar 805
13. Meritage Homes 800
14. D. R. Horton 792
15. KB Homes 783
16. Beazer Homes 779
17. Centex Homes 774
18. Grand Homes 761
19. First Texas Homes 752
20. Fox & Jacobs 752
21. History Maker 749
22. Toll Brothers 716
SOURCE: J.D. Power and Associates 2009 New-Home Builder Customer Satisfaction Study

Two New Programs to Help TX First Time Homebuyers!

Texas homebuyers who qualify for the federal first-time buyer tax credit have two new programs from the Texas Department of Housing and Community Affairs that enable them to turn that credit into cash for a downpayment.

• The 90-Day Down Payment Assistance Program enables buyers to receive 5% of the first-lien mortgage amount up to $7,000 for downpayment or closing costs as a 90-day no-interest loan.
• The Mortgage Advantage Program works in conjunction with the 2009 Texas Mortgage Credit Program and the Texas First Time Homebuyer Program. Eligible buyers could receive 5% of the first lien mortgage amount up to $6,000 for downpayment or closing costs as a 120-day no-interest loan.

Both programs require buyers be eligible for the federal first-time buyer credit, complete homebuyer education, and file an amended 2008 federal tax return. Funds are available on a first-come, first-served basis for qualifying purchases made before Dec. 1, 2009. For more information and full details about both TDHCA's programs click here!

New information on the $8K Tax Credit for First Time Homebuyers

More information has come out on the up to $8K tax credit for first time homebuyers, which would be 10% of the sale price on a home purchased, up to $8K. This is an actual credit, not an interest free loan like the original $7500 tax credit and you can claim it on either your 2008 or 2009 taxes. For more details read this article from cnnmoney.com.

$7500 First Time Homebuyer Tax Credit - Is It A True Credit?

Is the $7500 first time homebuyers tax credit that we have been hearing about truly a tax credit similar to the child tax credit? The answer is NO! In truth, this tax credit is really an interest free loan from the federal government to be repaid over 15 years.

This is how it works:

1. A first time homebuyer that purchases a home after 4/9/2008 files for the $7500 tax credit on his/her 2008 federal taxes and receives a nice return. For example, if you owe $5000 in federal income taxes you would pay nothing to the IRS and receive a $2500 tax return from the government. If you are due $1000 tax return, you would get an $8500 tax return with this tax credit.
2. Here's the kicker. When this first time homebuyer files his/her 2010 taxes if they claimed the credit on their 2008 taxes, they would have to pay $500 back to the government on top of what they already owe on their income taxes or to be deducted from what they would be getting as a tax return. The reason why I state 2010 is because the buyer doesn't have to start repaying the credit until two years after the tax year in which the credit was claimed. For example, if you owe $5000 in federal income taxes you would be required to pay $5500 to the IRS. If you are due a $1000 tax return, you would get a $500 tax return instead. This would continue each year for up to 15 years until the $7500 is repaid.
3. If the first time homebuyer sells the home, the remaining "credit" would be due from the profit of the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.

Not all people will qualify for this tax "credit" or for the entire $7500.

Who qualifies:

1. A first time homebuyer is defined by law as someone who has not owned a home or has not owned a home in the past three years.
2. First time homebuyers that purchase their home between April 9, 2008 and July 1, 2009.
3. Single or head of household buyers can claim the full $7500 if their adjusted gross income (AGI) is less than $75,000.
4. Married couples filing jointly can claim the full $7500 if their combined AGI is less than $150,000.
5. Single or head of household buyers who earn between $75,000 to $95,000 AGI are eligible for a partial "credit".
6. Married couples filing jointly who earn between $150,000 to $170,000 AGI are eligible for a partial "credit".
7. The "credit" is NOT available for single buyers earning greater than $95,000 AGI and married couples with an AGI that exceeds $170,000.

So, should you file for this "credit"? If you are in good credit standing and in no need of some immediate cash, I wouldn't. This will hang over your head each year until the "credit" is paid off and if you decide to sell before the "credit" is repaid, you would be responsible for paying the remainder of the "credit" in full from the profit of the home. Thus, no additional money to put on the downpayment of your new home. Now that you have the knowledge, the choice is yours.

For more information on this first time homebuyer "credit", contact your accountant and/or visit http://www.federalhousingtaxcredit.gov/ .