In addition to extending the tax credit of up to $8,000 through June 30, 2010, the extension measure also opens up opportunities for others who are not buying a home for the first time.

So Who Gets What?
The program that has existed for FTHBs remains intact with the one exception that more people are now eligible based on an increase in the amount of income someone may now earn.

Additionally, the program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Deadlines
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Higher Income Caps in Effect
The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.

First-Time Homebuyer Tax Credit – Frequently Asked Questions
Here are answers to some commonly asked questions about the tax credit.

What is a tax credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.

What is the tax credit for first-time homebuyers (FTHBs)?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

Who is eligible for the FTHB tax credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

How do I claim the credit?
For those taking advantage of the tax credit in 2009, you may choose to either apply for the credit with your 2009 tax return or you may apply for the credit sooner by filing an amended 2008 tax return with Form 5405 (http://www.irs.gov/pub/irs-pdf/f5405.pdf).

Can you claim the tax credit in advance of purchasing a property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

Can a taxpayer claim a credit if the property is purchased from a seller with seller financing and the seller retains title to the property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Examples of this would include a land contract, contract for deed, etc. According to the IRS, factors that would demonstrate the ownership of the property would include: 1. the right of possession, 2. the right to obtain legal title upon full payment of the purchase price, 3. the right to construct improvements, 4. the obligation to pay property taxes, 5. the risk of loss, 6. the responsibility to insure the property and 7. the duty to maintain the property.

Are there other restrictions to taking the credit?
Yes. According to the IRS, if any of the following describe your situation, a credit would not be due.

You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.
You do not use the home as your principal residence.
You sell your home before the end of the year.
You are a nonresident alien.
You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
Your home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
You owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2009, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2006, through July 1, 2009.

Can you buy a home from a step-relative and be eligible for the credit?
Yes. Provided the person you are buying a home from is not a direct blood relative, the purchase would be allowed.

Can parent(s) who will not live in the property cosign for a mortgage for their child and the child that is a qualifying FTHB still be eligible for the credit?
Yes.

Can a separated spouse who has not owned a home for four years qualify for the FTHB tax credit if the spouse has owned a property anytime in the last three years?
No. However, the spouse may be eligible for the repeat buyer credit. The best path to take in any situation regarding income taxes is to speak with a professional tax preparer or CPA.

If you have any questions that fall outside the situations here, give me a call and if you do not have an accountant to speak with, I can refer you to one.

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If you do not qualify for the refinance program, you may qualify for the “Making Home Affordable Modification,” for those of you who can answer yes to these simple questions:

1. Is your home your primary residence?

2. Is the amount you owe on your first mortgage equal to or less than $729,750?

3. Are you having trouble paying your mortgage? For example, have you had a significant increase in your mortgage payment OR reduction in your income since you got your current loan OR have you suffered a hardship that has increased your expenses (like medical bills)?

4. Did you get your current mortgage before January 1, 2009?

Your equity position is irrelevant with the Modification program, which may help save millions of families from losing their homes, especially within the hardest hit areas of the United States. You will have to be able to document your income.

Here’s the link to the government website: http://www.makinghomeaffordable.gov/

Let me know what your experience is with your efforts.

More than 205 million people in the United States have a credit card, car loan, mortgage, or student loan. Almost every one of them has a credit file. The information in your credit file is obtained directly from the companies you have credit with, as well as from government agencies such as the legal court systems. There are three major credit bureaus in the United States: Experian, TransUnion, and Equifax. Even though you are in good financial shape, there is a possibility of identity theft or just a simple error in credit reporting that might damage your credit file. The best way to track changes in your credit profile is to purchase a credit monitoring service. Usually the credit monitoring service includes a credit report and updates for 30 days.

Your rights under the Fair Credit Reporting Act:

You have the right to receive a copy of your credit report. The copy of your report must contain all of the information in your file at the time of your request.

You have the right to know the name of anyone who received your credit report in the last year for most purposes, or in the last two years for employment purposes. Any company that denies your application for credit must supply the name and address of the Credit Reporting Agency (CRA) they contacted, provided the denial was based on information given by the CRA.

You have the right to a free copy of your credit report when your application for credit is denied because of information supplied by the CRA. Your request must be made within 60 days of receiving your denial notice.

If you contest the completeness or accuracy of information in your report, you should file a dispute with the CRA and with the company that furnished the information to the CRA. Both the CRA and the furnisher of information are legally obligated to investigate your dispute. You have a right to add a summary explanation to your credit report if your dispute is not resolved to your satisfaction.

Credit Reporting Agencies:

Trans Union
www.transunion.com

Experian
www.experian.com

Equifax
www.equifax.com

By Les Christie, CNNMoney.com staff writer
April 3, 2009: 11:51 AM ET

NEW YORK (CNNMoney.com) — No state has been harder hit by the housing bust than California.

It has piled up more foreclosures and has endured among the worst home-price declines. The median price of a single-family home sold in February was $247,590, down 41% from 12 months earlier, according to the California Association of Realtors (CAR).

And home construction in the Golden State has nearly vanished: December housing permits shrank to about a quarter of what they were during the boom years, according to the National Association of Homebuilders.
0:00 /3:17Housing on the rebound?

But there are signs that California’s housing market may be coming out of this tailspin: Sales volume is increasing, investors are returning and inventory is shrinking.
Bringing back buyers

Low prices have brought out droves of buyers. In February, they purchased more than 600,000 homes, some 80% more than they bought in February 2007, according to CAR. And most of this activity is where prices are off 40% to 60% from their peaks.

In the Sun City area of Riverside County, for example, prices have fallen more than 35% over the past 12 months. Two-thirds of February’s sales in the area were of foreclosed properties owned by banks, according to Chuck Whitehead, broker with Coldwell Banker Associated Brokers.

“The sales rebound is largely centered around areas that have experienced the biggest impact from the subprime crisis,” said CAR chief economist Leslie Appleton-Young.
How low can home prices go in your city?

In more stable communities, where fewer homes were saddled with toxic mortgages, prices have not crashed as badly and sales are rebounding more slowly. But foreclosures still account for a significant portion of sales, according to Phil Jones, a broker with Coldwell Banker Coastal Alliance in Long Beach.

Most analysts foresee continued price declines in California, according to Nicholas Retsinas, director of Harvard’s Joint Center for Housing Studies. “But [there'll be] a slowing of that decline, which portends the end of price drops.”

That may already be happening in Long Beach, according to Jones. The measure he uses to judge market trends there, price per square foot, turned up in February, growing 5% to $360.

“Every one of my agents is very busy,” Jones said.
Investing 2.0

Another positive sign that markets don’t have much further to fall is that investors are returning to some markets.

“I spoke with one investor who is putting together a group of buyers and they’re ready to get back into the market,” said Jones. “They’re planning to buy single-family homes in bulk.”

John Dugan is one such investor. The San Francisco-based medical supplies salesman is using a portion of his Entrust Group-managed IRA to buy townhouses in the Sacramento area.

So far he’s purchased three 840-square-foot, two-bedroom, one-bath duplexes. He paid just $35,000 to $80,000 a piece – down from their $180,000 to $200,000 selling prices a few years ago.

He paid cash for the first property and rents it out for $750 a month, a profit of $550 after dues and common charges. That’s a 19% return on investment, without figuring on appreciation.

“This kind of pricing is something you only think of as Midwestern, not Californian,” he said.
Supply dropping

The booming sales have whittled away existing home inventory to just six and a half months – down from 15 months a year ago.

“Typically, I would describe a normal market as having a six to seven month supply of homes,” said Appleton-Young. “We have that now.”

California’s inventory now compares favorably with the rest of the nation, where there’s a 9.7 month supply of homes on the market, according to the National Association of Realtors.

One wildcard, however, is that banks have kept many repossessed homes off the market. “Banks are spoon feeding them out very slowly so they don’t overload the market,” said Whitehead. But, he added, if they release a lot of properties during the heavy spring buying season, they “will be eaten right up by buyers.”
Could the end be near?

All of those factors add up to a more optimistic forecast for California, which is seen as a harbinger of things to come for the rest of the country.

Appleton-Young said that while home prices should continue to decline for the rest of 2009, she predicts that the pace of decline will slow. In total, she’s predicting a total loss of 19% for the year. But, “I think we could see home price stabilization by early next year,” she said.

If that happens in California, it could spread to the rest of the hard-hit Sun Belt markets – and beyond.

“California was the pace setter for lots of the mortgage products that went toxic,” said Retsinas. “The sense is if the problems can be addressed there, the rest of the country will follow.” To top of page

Top six talking points:

1. New buyers:  This credit is equivalent to 10 percent of the purchase price of the home up to $8,000 and applies only to first-time home buyers of principal residences.  Unlike an earlier $7,500 home buyer tax credit, this credit does not have to be repaid if the buyer owns the home for at least three years.

2. First time buyers defined: For the purpose of this legislation, a “first-time home buyer” is someone who hasn’t owned a principal residence for three years before buying a house.

3. 2009 buyers only: Only those who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit.

4. Income limits: The tax credit is subject to income limitations.

5. Refundable: Because the tax credit is “refundable,” qualified buyers can take advantage of it even if they don’t have much tax liability.

6. Recapture: Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government. (Exceptions will be made in certain cases, such as death or divorce.)

TAKE ADVANTAGE OF THIS BENEFIT THIS IS THE BEST TIME TO BUY!

The fear is becoming paralyzing and it is impacting the ability of many to stand back and look at our current market and say “Who Moved My Cheese?”. That’s what has happened. There are opportunities in every market. You just have to find them.

It’s time to buy. Plain and simple.

Inventories are down over 24%, interest rates are at a historical low and the affordability rate is higher than we have seen in many years.

Gather your friends & family and become ‘investors’. Leverage the investment properties you currently have and increase your portfolio.

Remember…Once everyone else is doing it, the REAL opportunities have been missed.

What would Warren Buffett do?

Warren Buffett invests $3 billion in GE

Berkshire Hathaway buys preferred shares, plans to sell common stock

http://www.msnbc.msn.com/id/26976416/

Don’t let this opprotunity be in your rear view mirror.

NAME	LAST	CHANGE		% CHANGE
GENERAL ELECTRIC	21.50	+2.49		+13.10%