Utah Housing Equity NOW Program

Governor Gary Herbert announced today that first time home buyer's can now use their $8,000 tax credit for down payment and closing costs!

Utah Housing will give First Time Home buyer's, who meet the credit and income guidelines, a first mortgage loan and a small second mortgage loan for purchase of their home and also payment of closing costs and down payment.

The buyer then applies for the tax credit with an amendment to their 2008 tax returns and when received, can apply the money to their first or second mortgage used to purchase the home. If they apply the money to the 2nd mortgage within 6 months of the loan date, Utah Housing will credit them $100.

Here is the web link with all of the details:

http://b2b.utahhousingcorp.org/PDF/EQNborrower.pdf

I am an approved Utah Housing Lender and can help you with any questions which you have.

State of Utah Home Run 2 Grant Program

Great news! Today, Governor Gary R Herbert announced that there is new grant money available for purchase of a new construction home that has never been lived in before, a home that is being newly built, or a partially built home. There are 1,950 Grants ($7.8 Million).

Here is the Web site for FAQ's and I will be on the approved lender list for this Grant money, just as I was for the first Home Run Grant. Today the Utah Housing site is showing that the Approved Lender List is under construction. Call me and I can answer any of your questions! Here is the site for more information:

http://b2b.utahhousingcorp.org/PDF/HR2faq.pdf

Loved the book you gave me!

I finished the book, in about the two weeks I told you it would take me, and quite enjoyed it! I would definitely recommend it to anyone buying a home, it was so helpful and I feel educated about all the ins and outs of purchasing a house. Thanks!!

Keri Mathias

(I gave Keri the book, "100 Questions Every First Time Home Buyer Should Ask", which is part of my Planning for Success Program for First Time Home Buyer's)

Clearfield Grant Money Available as of 4/15/09

Clearfield Grant money is now available, but it is limited and going fast! There are only 14 more grants of $5,000 available as of today (4/16). I have the 52 page program guideline if you would like me to forward it to you. There are income limits on the program, the buyer needs to be a first time home buyer, there is a forgiveness of the grant over a 7 year declining period and there is a 3:1 matching required (if the buyer puts $1667 down, Clearfield will give $5,000).

FAQ on the 2009 $8,000 tax credit

Here is a useful site to answer Frequently Asked Questions about the First Time Home Buyer tax credit: http://www.federalhousingtaxcredit.com/2009/faq.php#10

$6,000 State of Utah Grant Money Now Available

Governor signs bill for new homes grant

Gov. Jon Huntsman Jr. signed a bill yesterday that will provide $6,000 grants to buyers of newly constructed, never-occupied homes. Upon his signature, he immediately directed the Utah Housing Corporation to begin dispersing grants under the “Home Run” program to buyers who finance a recently constructed home with a 30-year (or less) fixed-rate mortgage and meet other qualifications.

Senate Bill 260 created a fund that will use federal stimulus dollars to provide about 1,600 grants to be distributed through Utah Housing Corporation to home buyers on a first-come, first-served basis.

To apply for the grant, home buyers should work through their lender. Any mortgage lender qualified to make mortgage loans under Utah law can assist home buyers to secure the Home Run grant, but Utah Housing has a list of currently approved lenders. Lenders will work directly with Utah Housing Corporation to apply for the grant money. Examples of qualifying mortgages include conventional, FHA, VA, Rural Housing and Utah Housing loans. Cash buyers should work directly with Utah Housing.

Consumers do not have to be first-time buyers to qualify for the program but incomes cannot exceed $75,000 for singles and $150,000 for married couples. Buyers who qualify for both programs can take advantage of the $8,000 federal home-buyer tax credit as well as a Home Run grant.

“It is up to the states to use the federal stimulus money in a way that truly has a beneficial impact on our economy. This is an immediate stimulus targeted at the weakest area of Utah’s economy,” Huntsman said in a press release. “This investment of $10 million will result in 8,800 jobs in the market and $324 million in wages into our economy. This boost is critical for us to reverse our current position.”

To learn more about program details and how buyers can apply, visit www.UtahHousingCorp.org . Also visit www.UtahHousingFacts.com for information about both the Home Run program and the $8,000 federal first-time home buyer tax credit.

Housing Affordability Index at a Record High

The National Association of Realtors’ Housing Affordability Index has risen 13.6 percentage points to 166.8, a new record high (December 2008: 153.2 to January 2009: 166.8). A value of 100 means that a family with the country’s median income has exactly enough income to qualify for a mortgage on a median-priced existing single family home. The higher the index, the more income buyer's are making relative to home prices (and the better housing affordability is for the buyer).

The reading shows that the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking began in 1970. “History suggests that home sales can rise even in times of job losses when housing affordability rises,” said Lawrence Yun, the association’s chief economist. (Source: The Enterprise March 16-22, 2009)

How long before our economy recovers?

IT MAY TAKE SOME TIME - The current bear market (defined as a drop of at least 20% of the S&P 500 stock index from a previous closing high) is the 9th bear market in the last 50 years and the 3rd where the loss has been at least 40%. The current bear’s “peak to trough” drop is 56.4%, the low close occurring just last Thursday (on 3/05/09). It took the S&P 500 index 70 months and 56 months to recover back to a new closing high following the 2 previous bears where the loss exceeded 40%. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research).

Refinancing Initiative: 105% of Current Market Value

Refinance Opportunities Now Available
to Those Who Lack Sufficient Equity

Revised March 4, 2009

The Obama Administration unveiled the final details of its "Making Home Affordable Program," which is designed to help up to 9 million American families refinance or modify their loans to a payment that is affordable now and into the future.

One of the initiatives in this program is aimed at helping responsible homeowners "refinance" their loans to take advantage of historically low interest rates. Here are some common Questions and Answers about the Refinancing Initiative in the program.

REFINANCING INITIATIVE

Who is eligible?

You may be eligible if:

• You own and currently occupy a one- to four-unit home.
• Your mortgage is owned or controlled by Fannie Mae or Freddie Mac.
• You are current on your mortgage payments.
• The amount you owe on your first mortgage is about the same or slightly less than the current value of your house.
• And, you have a stable income sufficient to support the new mortgage payments.

How do I know if my loan is owned or controlled by Fannie Mae or Freddie Mac?

Simply call or email me. I'll help you determine if your mortgage is backed by Fannie Mae or Freddie Mac.

I owe more than my property is worth. Do I still qualify to refinance under the Making Home Affordable Program?

Eligible loans will include those where the first mortgage will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less, you may qualify. The current value of your property will be determined after you apply to refinance.

If I am delinquent on my mortgage, do I still qualify for the Refinance Initiative?

No. But the good news is, you may qualify for the Modification Initiative. Contact me to discuss your situation and review your options.

I have both a first and a second mortgage. Do I still qualify to refinance under Making Home Affordable?

As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible for the Refinance Initiative.

Will refinancing lower my payments?

That depends. If your interest rate is much higher than the current market rate, you would likely see an immediate reduction in your payment amount.

However, if you are paying interest only on your mortgage, you may not see your payment go down. BUT... you will be able to avoid future mortgage payment increases and may save a great deal over the life of the loan.

What are the terms of the refinance and what will the interest rate be?

All loans refinanced under the plan will have a 30- or 15- year term with a fixed interest rate.

The interest rate will be based on market rates at the time of the refinance. Currently, interest rates are at historical lows, which makes this a good time to examine your refinancing options.

Will refinancing reduce the amount that I owe on my loan?

No. Refinancing will not reduce the principal amount you owe. However, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.

Can I get cash out to pay other debts?

No. Only transaction costs, such as the cost of an appraisal or title report may be included in the refinanced amount.

How do I apply for the Refinance Initiative?

Call or email me today to discuss your specific situation and to examine your options. If this plan is right for you, we can begin working on your refinance immediately.

As part of the discussion, we may need to look at the following information:

• Recent 30 days pay stubs to help determine your gross (before tax) household income.
• 2008 and 2007 w-2's and if self employed, your most recent 2 years income tax returns.
• Information about any second mortgage on your house.
• Account balances and minimum monthly payments due on all of your credit cards.
• Account balances and monthly payments on all other debts, such as student loans and car loans.

As always, if you have any questions or would like to discuss how this may specifically impact you, I'd be happy to sit down with you. Just call or email me to set up an appointment.

2009 Stimulus Plan Update

Revised February 20, 2009

Tax Credit for Homebuyers
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

Tax Credit Versus Tax Deduction

It’s important to remember that the $8,000 tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a homebuyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing.

Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a homebuyer is liable for $4,000 in income tax, he can offset that $4,000 with half of the tax credit… and still receive a check for the remaining $4,000!

Phaseout Examples

According to the plan, the tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.

To break down what this phaseout means to homebuyers who are over those amounts, the National Association of Homebuilders (NAHB) offers the following examples:

Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.

Example 2: Assume that an individual homebuyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.

Remember, these are general examples. You should always consult your tax advisor for information relating to your specific circumstances.

Homes that Qualify

The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify.

Higher Loan Amounts

More good news – there is an extension on the additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans will again be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard “jumbo” loan rates.

Additional Housing-Related Provisions

Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing—This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance—This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

More Help for Homeowners in the Future
Another thing to keep an eye on in the coming weeks is President Obama’s plan to help struggling borrowers before they are faced with a default on their mortgage.

According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.

While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That’s because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.

The Economic Stimulus Plan is huge, and impacts a number of industries. I’ve highlighted some of the major provisions that may impact you now and in the future.

As always, if you have any questions or would like to discuss how this may specifically impact you, I’d be happy to sit down with you. Just call or email me to set up an appointment.

Getting Ready to Move Checklist

Getting Ready to Move? Here is a Checklist! 4 WEEKS PRIOR TO MOVE: __ Set up a "move" file or folder __ Set up a "move" calendar. __ Have a garage sale. __ Collect financial, tax and employment documentation needed for your loan. __ Donate un-needed furniture to charity. __ Contact insurance company to transfer policies (life, auto, homeowners). __ Contact doctors, dentists for copies of medical records. __ Contact schools for copies of student records. 3 WEEKS PRIOR TO MOVE: __ Review tax deductions on moving expenses. __ Arrange cut-off date for telephone, gas,electricity, water, garbage, cable television. __ Call friends and relatives to let them know you are moving. __ Request change of address kit from post office. __ Check out voter registration information for the new area. 2 WEEKS PRIOR TO MOVE: __ Transfer stocks, bonds, bank accounts and contents of safe deposit boxes. __ Prepare a list of clothing that will not be packed with household goods. __ Take time to check off previous listed items while you still have time! 1 WEEK PRIOR TO MOVE: __Label items you will need to access easily and place them in separate room or closet. __ Clean out your refrigerator and let it air out at least 24 hours before moving. __ Drain outdoor equipment: Water hoses, propane tank from BBQ grill, gas and oil from lawnmowers. __ Discard all aerosols, paint, oils, and other flammable or toxic chemicals. __ Schedule with utility companies to have utilities turned on at your new home. MOVING OUT DAY: __ RELAX!!! __ Remember, items packed last will be unloaded first. __ Last Walk through Check: attic, stairwells, closets, cupboards, storage, garage and behind doors MOVE IN DAY: __ Have the house ready for delivery prior to the truck's arrival. __ Take a break, sit back, relax and ENJOY YOUR NEW HOME!! Take the stress out of your moving day! Call me if there is anything I can help you with!