Washington State First Time Home Buyers

Posted By Scott Cowan on March 7, 2010

As of April 30th. 2010 you will need to be under contract to be considered eligible for the $8,000 First Time Home Buyer Tax Credit OR for the $6,500 Step up Buyer Tax Credit.

Why are we sharing this information? Simple even if the tax credit can not be advanced to help with down payment and closing costs in Washington State it is still a very nice rebate on a home purchase. If you are looking or if you are thinking about looking I would recommend making sure you are doing all that you can to position yourself to take advantage of the credits.

This site will be fading into the sunset as well. Once the tax credit expires so will our site….

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Posted By Scott Cowan on November 6, 2009

Today the First Time Home Buyer Tax Credit has been extended until April 30th. 2010.

Additionally the tax credit has been expanded to allow people who have owned and lived in their home for five of the last eight years the opportunity to receive a $6,500 tax credit if they sell their home and purchase another home.

Currently in the State of Washington there is no way to receive the $8,000 tax credit until after closing on your home purchase.

If you are interested in learning more about how the Tax Credit might open doors to home ownership please contact me via this blog.

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Posted By Joanne Rocheford on July 1, 2009

Sound familiar?  What a great country we live in where we can openly blame the government and no one comes pounding on our door to take us away. 

So part of the plan with the $8000 loan giving one an advance on the first time home buyer tax credit was to have the Washington State Housing Finance Commission (WSHFC)  provide the actual logistics of distributing the funds and getting reimbursed by the IRS.  The WSHFC was involved in discussions with the IRS and other interested parties regarding the development of a Tax Credit bridge loan program. 

To guarantee repayment of a Tax Credit bridge loan the WSHFC requested the IRS approve an advance assignment of the tax credit refund.  If approved, the homebuyers $8,000 tax credit refund would be directly deposited into a state-owned account or mailed directly to the loan servicer for immediate payoff of the Tax Credit bridge loan.

On June 2, 2009 the IRS formally declined this request citing long-standing regulations that require refunds be paid only to the person or persons filing the tax return.  Due to financial risks associated with the Tax Credit bridge loan program  the WSHFC   the Commission has discontinued the development of an additional Tax Credit Bridge Loan program.

Seeing how we have just a few months left to qualify for the credit in the first place it doesn’t look like we’re going to have a plan in place to advance the funds at closing.   I’m sure other down payment assistance programs will pop up as time goes by.  We may even structure this site to cover some of those options. 

The Washington State Housing Finance Commission offers the House Key Plus program which offers up to $10,000 in down payment assistance at a 5% interest rate on a ten year loan term.  Restrictions apply of course.  

I’ve enjoyed all the phone calls from those of you ready to buy a home and are persistent to find a way.  When you set the goal, it does happen.  I’ve helped quite a few of you buy homes once we put a plan in place to get there. 

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Tags: $8000 Tax Credit

Posted By Scott Cowan on May 29, 2009

Just announced this morning OK WAIT IT’S NOT THAT SIMPLE….

HUD has announced that the Federal $8,000 Tax Credit can be used towards the 3.5% minimum required FHA downpayment for first time home buyers.

This allows banks to provide bridge loans to home buyers to leverage the $8,000 Tax Credit as a down payment. Potentially helping many people who have good stable jobs, good credit, but are lacking the necessary cash to purchase a home. This will allow many to take advantage of the lower home prices, the attractive interest rates, and the large inventory of homes for sale.

Here is some text from the HUD letter. I have bolded the parts that in my opinion are of vital importance.

Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today’s announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower’s own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today’s action permits the first-time homebuyer’s anticipated tax credit under the Recovery Act to be applied toward the family’s home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.

Here is the letter from HUD Stimulus tax credit can be used on first-time home purchase.

Realtor Magazine has an article that provides more information.

I will be adding to this post as the media continues to provide information.

The Chicago Tribune has an article Government to allow use of tax credit for down payments.

If you’re ready to start looking at houses please give me a call 253-219-1194. This opportunity is one that you need to act on.

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Tags: $8000 Tax Credit, First Time Buyers

Posted By Scott Cowan on May 26, 2009

In Washington State we are now waiting on the IRS to determine if the $8,000 Tax Credit can be used as a down payment. The program is ready to go once the IRS decides how they can handle the particulars.

In the Seattle PI today there is an article detailing the challenges the IRS is working on to allow the $8,000 Tax Credit to be turned into a Tax Credit Advance. At this time it appears the cost of using the $8,000 will be approximately $350 including interest. The IRS is trying to put together a process to send the tax refund directly to the lender instead of the individuals who are filing for the tax credit.

Once the IRS has decided to allow this program to be used for down payment the State of Washington appears ready to move forward. Every day that goes by before this program in enacted is one less day that potential buyers have to use the Tax Credit towards the down payment. As prospective home buyers I strongly recommend you begin today to get your approvals in place and to start looking at what homes are available in your market at your price point. The clock is ticking and this opportunity will not wait for you.

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Tags: $8000 Tax Credit, First Time Buyers, IRS

Posted By Joanne Rocheford on May 21, 2009

When asked to blog for folks in the past, I often wondered how someone could come up with something new to say every day.  Well in the wonderful world of mortgage loans, there is something new happening every day. 

Here’s the latest:  As you know the legislature passed the Washington State Budget which included $125 million for advance loans on the $8000 tax credit.  We were waiting for Christine Gregoire to sign.   She has now signed the budget.  The National Association of Realtors has agreed to back the loans. FHA has in their guidelines that they will allow a loan to be used as a down payment toward the purchase of a new home if the loan is a secured loan.  By The National Association of Realtors agreeing to back the loans, they become a secured loan.  The plan is to run the money through the Washington State Housing Finance Commission (WSHFC).  

The IRS has a provision that requires tax checks to be mailed directly to the tax payer.  The WSHFC wants the refund check to be sent directly back to them to pay back the loan. 

As we all know, most of the tax code has been written by attorneys.  A small detail seems so minor and yet who knows how long it will take to rewrite the code.  I understand President Obama is trying to work with the IRS to correct this small detail.  It seems we have such a small window of opportunity and yet when have we ever known the government or the IRS to move quickly.    We shall see.

If you have any questions about the $8000 tax credit advance payment program or anything else having to do with home loans, please don’t hesitate to call my office at (206) 242-0800.

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Tags: $8000 Tax Credit, First Time Buyers, Lending, tax credit

Posted By Joanne Rocheford on May 20, 2009

I notice the $8000 tax credit is now the buzz word on the streets.  Every time I turn around, I hear, “Buy a house.  Get an $8000 tax credit!” 

I go to an open house and there it is, “Get $8000 tax credit.”

It’s on the radio, “Now is the time to buy a house.  Great rates and you’ll get an $8000 tax credit.” 

Realtors are calling me asking me to make flyers for them all about the tax credit.  Of course I think the tax credit is huge.  The IRS isn’t talking about a tax deduction which is a subtraction of how much income you will pay taxes on.  The IRS is talking about an $8000 credit in your taxes which is real cash paid back to you.  It is very exciting.  How often does our government pay you to buy something? 

Be careful though.  There are just a few small details no one is talking about.  Most people know that you have to be a first time home buyer.  The IRS considers you a first time homebuyer if you (and your spouse if married) did not own any other main home during the 3-year period ending on the date of purchase.  

There are two other important stipulations.  You cannot purchase the home from a family member.  I’ve actually had two people who wanted to do this in the last month so it’s not as uncommon as you might think.  And finally, the detail that I think is pretty important, you cannot claim the credit if your modified adjusted gross income is $95,000 or more ($170,000 or more if married filing jointly.) 

As long as you are a first time home buyer, buying a house from a stranger and you make less than $95,000, go buy a house and enjoy a gift of $8000 from your government. 

If you’d like any additional details, feel free to call my direct line at (206) 242-0800.  I’ll be happy to answer any questions you may have.

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Tags: First Time Buyers, tax credit

Posted By Scott Cowan on May 19, 2009

Earlier today I received an email that had a link to an article in the Arizona Republic. The article said that the Tax Credit was ineligible to be used as a down payment for a home purchase. Later today the Seattle PI has a post that says the earlier statements about the tax credit being ineligible are incorrect and that they are still trying to work out the details.

What does this mean for you the potential home buyer who is looking to use the $8,000 to help cover the initial costs of buying your first home? IF your like most people it means you wait and see what the government does and then you make your decision. I strongly recommend a different course of action. I am recommending that you get your ducks in a row and position yourself to act as soon as the announcement is made. Lenders will be very busy with an increase in loans, agents will be busy working with new buyers, appraisers and home inspectors will be having more work than they have had in a while. You need to be the most organized home buyer you can be. Meet with a real estate agent, (I recommend you call me if you live in the Seattle Tacoma area) tell them your situation make sure that they are qualified to work with you. Call a lender (I recommend Joanne Rocheford or Georgette Ballard) have them get started looking over your credit etc. Start looking at houses and see for yourself what is out there that you can afford and that you like. When the decision is made you will be miles ahead of most of the people who waited to get ready. If for some reason the $8,000 tax credit is not allowed for a down payment, you have only helped yourself with regards to getting ready to buy a house in the future.

So, can the $8,000 tax credit be used for a downpayment? Who the Hell knows as of May 19th. 2009 I bet we hear something soon though. Make sure you’re ready if you want to take advantage of the credit, low rates, and the great selection of homes.

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Tags: $8000 Tax Credit, First Time Buyers, Lending

Posted By Scott Cowan on May 13, 2009

Announced on May 12th. at the NAR Real Estate Summit the Federal Housing Administration is going to allow its lenders to permit homeowners to use the Federal $8,000 Tax Credit for a downpayment.

The stated purpose of this is to help stabilize the housing market nationwide. Details are still being worked out. Check back for updates as we get them.

Make it easy on yourself. Sign up for our email updates and you will be up to date when the news is published. Buying a home this year just became realistic for more residents of the State of Washington and the entire United States!

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Tags: $8000 Tax Credit, First Time Buyers

Posted By Scott Cowan on May 8, 2009

This article was submitted by Joanne Rocheford, Certified Mortgage Planner in Burien, WA.

Our hope is that it will help you begin to prepare yourself for the opportunity to take advantage of the State of Washington First Time Home Buyers Tax Credit Advance Program. Please feel free to leave comments.

How to get your hands on some of the billions of dollars our government is giving away.

What a great country we live in and now what a great state! Washington state legislature has put together a budget which includes 25 million dollars in loans for first time home buyers that purchase a home between now and November 30th 2009. This is a loan of $8000 to be paid back when you get your $8000 tax credit from the Federal government. This budget must be now signed by our governor. I called Governor Christine Gregoire’s office today to find out when she is supposed to take action on this. She has until May 19^th to either sign it or veto it.

What does this mean for you?

If Governor Gregoire signs the budget, this will mean if you purchase a home between now and November 30th, you can actually get your hands on $8000 at the closing of your new home. This $8000 becomes real cash that can actually be used toward a down payment on a home.

What can you do to get started so you can be one of the few people smart enough to get in and get your free money during this small window of opportunity?

In order to buy a home today, most people still need to obtain a loan. The best thing you can do to prepare yourself for this incredible opportunity is making sure you can get a loan to purchase a home of your own. I can help you with this. If you give me a call and plan to take about thirty minutes, I will walk through your personal information with you.

When you call to get approved for a loan, you can anticipate me asking how long you’ve lived in your current home, how long you’ve been on your job, how much money you make and how much money you have.

I’ll walk you through how a bank determines how much they’ll loan to you and let you know just how much home you can afford to buy. Once we’ve had a thirty minute conversation, you can anticipate me following up our conversation with an email letting you know what documentation we will need to approve you for a loan.

Here is the kind of information you will need to gather up. We will ask you to sign an authorization form giving us permission to verify your information. In addition we will ask for the following documentation:

2007 and 2008 W2s

Two most recent pay stubs covering thirty days worth of work. If you get paid every week, we will ask for four pay stubs.

Two most recent bank statements. Lenders want real statements that come in the mail from a bank and they want to see all pages. Most people want to send me just the first page or not the last page which doesn’t have anything on it but we must have all pages. It’s often convenient to print something from online but these online statements often don’t have your name or account number on them so the lender usually still insists on getting a real statement.

One investment statement as applicable. If you have a 401K or investment account, we ask for a copy of your most recent statement. If you have so so credit, this can make you look stronger as a loan applicant.

If you are self employed, we will ask for two years tax returns with all schedules. We will use your net income from schedule C after you have deducted expenses.

If you are on social security income, we will ask for the social security award letter.

If you’ve been divorced, we will ask for a copy of the divorce decree.

There are a few other variations of what a lender might ask for you to document but I can let you know what documentation we might need based on your personal situation.

It takes about a week to get a formal loan approval but it feels great once you get it. Then you can get on the fun part of getting out there and shopping for a home to call your own.

Give me a call today so we can get you your $8000! 206-242-0800

Joanne Rocheford
Certified Mortgage Planner
Rocheford@msn.com
Ph. 206-242-0800
Fax. 206-225-2017

Please sign up for our information packet. Our goal here is to help pair first time home buyers with qualified real estate agents and mortgage professionals.

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Tags: $8000 Tax Credit, First Time Buyers, Lending