$8000 Tax Credit Advance for Downpayment – UPDATE

Previous posts have detailed the Washington State Legislature’s efforts to get the Fed’s $8,000 first time home buyer credit available for use as a home buyer’s down payment at closing. Washington’s Governor Gregoire has signed the legislation that allows the Washington State Housing Finance Commission to make the funds available, however the program’s implementation has stalled at the IRS office.

A recent notice from Washington REALTORS® states they are working on alternatives to make this program available by the end of June.

Washington REALTORS® have provided the money to guarantee the program and all that is left is some sort of mechanism to ensure that when the borrower receives the $8,000 from the IRS, those funds are dedicated to pay off the bridge loan.

In the meantime, what can you do Now to prepare?

Attend a Free Homebuyer Education Class: First Time Home Buyers can attend a Washington State Housing Finance Commission Sponsored Home Buyer Education Seminar; this 5-hour seminar is a requirement for receiving a loan from the Commission. 

Once the Washington State Tax Credit Advance Loan Program does become available, as it is a loan, completing the Commission Sponsored First Time Home Buyer Education Seminar will be required.  Once you have your certificate, you will then be eligible to participate in the down payment advance program.

Steve Swanson is an instructor of First Time Home Buyer Seminars sponsored by the WSHFC.  Register online for his next class at www.helloRealEstate.net 

For a list of all the upcoming classes in the State of Washington sponsored by The Washington State Housing Finance Commission, visit www.WSHFC.org

  

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Are We There Yet!??

Like a ten year old on a road trip, people are wondering if real estate prices have hit the bottom… are we there yet?  It goes beyond the usual “how’s the real estate market?”  More than ever, it’s:  Is this a good time to buy?  How do you buy a foreclosure?  Is it hard to get a mortgage?  Are homes selling … How long would it take to sell my home?  What if we buy and prices continue to go down?  Are interest rates going to increase?
 
It does seem that prices in the Seattle Bellevue Redmond real estate market are starting to level off.  While this is not true in the counties of Pierce, Thurston and areas in Snohomish County… King County and specifically Seattle and the Eastside have seen increases in home sales and a stabilization of pricing.  This is especially true for King County condos and homes under $400,000.  Many first time home buyers and those who have been waiting on the sidelines are jumping in and taking action as they find more affordable pricing and terrific interest rates.  Even if prices slide a bit more, all it takes is an interest rate bump and buying power can diminish.

Though it is a buyer’s market, it is only a buyer’s market if you buy.

If you are in the market to buy, Now is a great opportunity. Home sellers are still anxious as their home prices have fallen and many homes continue to sit waiting for a buyer.  Home foreclosures and short-sales have increased.  Interest rates are incredibly low.  There are also many First Time Homebuyer products available.  And the Housing Stimulus Bill provides a First-time Home Buyer credit of $8,000.   These facts, along with lower prices and tax advantages, even if the market hasn’t hit bottom, a buyer could loose money by waiting to purchase.

But the main point in home ownership is not even the economics.  While it is a fact that buying and holding real estate has been a great wealth generator, there is still ‘no place like home.’  Home is where families create memories.  Our home is our sanctuary.

Even with investment considerations, the main reason to purchase a house or condo is to live there.

Housing Activity Surges in King County

In a news release published today by the Northwest Multiple Listing Service, pending sales reported by members showed an overall increase of 11.4% from a year ago and up 21.3% from March.  Though these statistics are averages of the 19 counties that make up the NWMLS market area, there are areas where the surge in real estate activity isn’t so promising.   Also tempering this rare positive news is that activity for the moderate and upper priced homes still continue to be slow.  While the Seattle area real estate market is far from being turned around, the report is encouraging for condos, the more affordable lower priced single family homes and for the First Time Home Buyer.

In King County specifically, the report shows that the inventory is shrinking, that home prices seem to be stabilizing, and that real estate sales is showing a surge of activity.

Reasons for the real estate surge can be attributed to lower home prices along with the continued availability of remarkably low interest rates.  The $8,000 First Time Home Buyer Tax Credit and other programs are also playing a part.

Pending Single Family Sales in King County rose 25% from March to April. North King County  pending sales rose a whopping 52% (includes Shoreline, Kenmore).  The increase in pending sales on the Eastside was 35%.  Prices are still down compared to a year ago, however the median price for a single family home in King County for April is the same as it was in March at $350,000.

Pending Condo sales in King County, where nearly 60% of the condo sales occur, were still down compared to a year ago but jumped 42% from March.

What the stats show is that the demand is increasing.  With the inventory (the supply) decreasing,  Economics 101 rule of supply and demand is starting to have an affect on the stablization of home prices.

The real estate market is still highly advantageous to a home buyer.  It is still a buyer’s market.  Real Estate is ‘On Sale’.  Good prices can be found at every price level.  For the first time home buyer and those in the market for single family homes under $400,000 or condos or townhouses, the prices – the interest rates – the tax credit … the timing is right.

Steve Swanson is a Redmond Real Estate Agent servicing Redmond and the Eastside, and teaches First Time Home Buyer Classes in Redmond Bellevue Bothell Kirkland and Sammamish.

Search for Seattle area homes at www.helloRealEstate.net
Do your Redmond Home Search at www.RedmondHomesandCondos.com

 

Tax Credit Advance Loan Program waiting for Special Session

Included in the budget passed by the Washington State Legislature is a $25 million dollar fund to implement a Tax Credit Advance Loan Program for First Time Home Buyers.  (The definition of a First Time Home Buyer is basically if you have not owned a home in the past Three years.)

Introduced by Washington State Treasurer James McIntire, this program will allow qualified borrowers to get immediate access to the $8,000 Federal Tax Credit for use at closing as a home down payment.  Like the Federal Credit, this loan program expires November 30, 2009.

When does it start?

The Tax Credit Advance Loan Program is part of the 2009 Washington State budget which has not yet been signed off by Governor Gregoire.  Though the Legislature adjourned on April 26th, there is apparently going to be a need for a special session before the budget can be implemented.  The special session is expected to convene sometime within the next few weeks and is expected to be very short, possibly held to one day.  Since this proposal is not a bill, which can be signed into law separately, but part of the budget … it can not be implemented until the budget is approved and signed by Governor Gregoire.

The Washington State Tax Credit Advance Loan Program is in essence a bridge loan that will be administered by the Washington State Housing Finance Commission (WSHFC).  The $25 million of state funds would be deposited into an FDIC-insured bank. The bank would then provide revolving lines of credit to the WSHFC expand its current down payment bridge-loan program.

To help offset concern of any unexpected losses, The Washington Association of Realtors (NAR) has pledged $400,000 to cover the credit advance transactions.

State Treasurer McIntire is also trying to convince the Obama administration to allow the state to tap into bridge-loan-assisted homebuyers’ amended 2008 tax returns and be directly assigned the repayment of the lien. Under current IRS rules, tax-refund checks are sent only to the taxpayer’s address. To ensure prompt repayment of bridge loans, the state would like to have refunds mailed directly to the Washington State Housing Finance Commission where repayment of a bridge loan is due.

Research by the NAR has shown that fully half of all would-be first-time home buyers in the State of Washington”cannot save enough money for the down payment and closing costs” –  even though they could afford the monthly payments.

Once implemented, the Washington State Tax Credit Advance Loan Program will help First Time Home Buyers to take advantage of the current low mortgage rates and house prices, and the Federal $8,000 tax Credit.

Steve Swanson teaches First Time Home Buyer classes in Redmond Kirkland Bellevue Bothell and Sammamish sponsored by the Washington State Housing Finance Commission.  To Register for an upcoming class go to www.hellorealestate.net or view the class schedule for your area at http://wshfc.org/buyers/schedule.asp