$7500 Tax Credit for 1st Time Homebuyers!

I know what you are thinking. What's the catch? Before I get there let me fill you in on some changes that were included in the recent Housing Bail out bill that was passed by congress recently.

The current market benefits first time home buyers tremendously. Home values have come down and sellers have been able in many cases to cover buyers down payments and closing costs. That is all about to change. Effective October 1st 2008 sellers and third party gifting programs, such as Ameridream, and Nehemiah will no longer be able to gift the required 3% down FHA requires from buyers. In addition the minimum down payment will increase from 3% to 3.5%. Sellers are still able to contribute up to 6% towards the buyers closing costs and pre-paid items(Taxes, Insurance etc). However the required down payment funds most now come from the buyer alone. So if you have been on the fence about buying a home and need down payment and closing cost assistance you have until September 30th to close! So get moving!

O.K. so that is not the best news for some 1st time home buyers out there. But there is some real exiting news as well. First. The FHA loan limits for the Jacksonville area have increased to $387,500.00! This is great news if you have been looking for a home in that price range but did not have the 10% - 20% down that most conventional lenders are requiring for loans at this level. Rates are still very strong and have been holding around 6.5%. So take advantage of this time. This FHA loan limit is temporary and can be reduced at any time. In addition to increasing the loan limits the Feds are allowing a Tax Credit up to $7,500 or 10% of the purchase price, whichever is less, for first time home buyers. As you may know a tax credit gets subtracted from your tax liability at the end of the year. For example if you owe $1,500 at tax time in April you will get a refund of $6,000. Now this credit must be paid back in equal installments over a 15 year period at tax time. Interest free.

That is pretty good news for buyers in a market that favors buyers at the moment. For more information feel free to contact me or visit my website http://www.MattSellsJax.com