Saline Real Estate and Homes for Sale

If you're looking for a Saline home or condo, here's another reason to buy, NOW!

In one of the most rapidly approved bills in memory, the Housing and Economic Recovery Act was passed into law, and could have significant implications on the housing and mortgage industry. 

Effective January 1, 2009, the FHA minimum cash investment requirements (down payment) are increasing from the current 3.0% to 3.5% of the sale price. 

The other bit of info that was included in this legislation is the $7,500.00 tax credit. Those who have NOT owned a home the last three years will qualify for this credit (some restrictions apply).  Buyers will get a maximum $7,500.00 tax credit if they purchase a home after April 8, 2008 and before July 1, 2009.  The tax credit will be 10% of the purchase price of a home, up to a maximum of the full $7,500 credit.  So, a sale price of $75,000 will qualify a buyer for the entire tax credit, as long as they meet the following requirements (please check with your CPA to see how you can make this first-time homebuyer income tax credit/loan work for you).

Income Limitations

Married couples with incomes less than $150,000.00 qualify for the entire tax credit.  The tax credit phases out for married couples with incomes between $150,000.00 and $170,000.00.  Couples with incomes exceeding $170,000.00 do not qualify for the tax credit.

Singles with an income less than $75,000.00 qualify for the entire tax credit.  The tax credit phases out for singles with incomes between $75,000.00 and $95,000.00.  Singles with incomes exceeding $95,000.00 do not qualify for the tax credit.

The tax credit will have to be paid back over a period of 15 years...but Washington just provided first time homebuyers a 15-year interest free loan to help them buy a home! 

If a buyer is having trouble coming up with the minimum down payment required, they can use this tax credit to their advantage.

With the Federal Housing Administration program (FHA), a gift from a parent or family member is allowed.   A homebuyer can borrow their minimum down payment of 3% (3.5% after January 1, 2009) and pay back the gift with the tax refund.

Another way to make the credit work is to borrow from a 401K or other retirement plan and pay it back with the tax refund.

The tax credit is really an interest-free loan from the government that must be paid back over fifteen years, in increments of $500.00 a year, beginning with the second year after you purchase a home.  So, for buyers who purchase in 2008, the first $500.00 installment will be due 2010 through 2024. The following will also apply....

• If you die, any remaining annual installments are not due. If you filed a joint return and then you die, your surviving spouse would be required to repay his or her half of the remaining repayment amount.
• If you stop using the home as your main home, all remaining annual installments become due on the return for the year that happens. This includes situations where the main home becomes a vacation home or is converted to business or rental property. There are special rules for involuntary conversions.  Taxpayers are urged to consult a professional to determine the tax consequences of an involuntary conversion.
• If you sell your home, all remaining annual installments become due on the return for the year of sale. The repayment is limited to the amount of gain on the sale, if the home is sold to an unrelated taxpayer. If there is no gain or if there is a loss on the sale, the remaining annual installments may be reduced or even eliminated. Taxpayers are urged to consult a professional to determine the tax consequences of a sale.
• If you transfer your home to your spouse, or, as part of a divorce settlement, to your former spouse, that person is responsible for making all subsequent installment payments.

This credit/loan is a unique way for those with limited funds to purchase in a market with prices we may never see again, and rates are still very attractive. It's the PERFECT time to buy.

Consult with your local lender about your $7500 tax credit.

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If you're considering  a Saline home or condo, you owe it to yourself to take advantage of my experience in the Saline market.  I'd be happy to meet with you!  Just give me a call at (734) 476-2063, or send an e-mail, "Vance (at) SalineMichiganRealEstate (dot) com".

You can search for homes and condos in Saline here.