Today President Obama signed a bill extending and expanding the homebuyer tax credit. Now that the bill has become law, VAR has a new flyer to help you inform your clients about the expanded tax credits that you can download today at www.VARealtor.com/Tools.  Download it now for showings this weekend!

The extension and expansion of the homebuyer tax credit is a testament to the determination and persistence of Realtors^® and their associations.  We want to say thank you.  By responding to calls to action, contacting your legislators, and encouraging your fellow Realtors^® to do the same, NAR lobbyists were able to ensure passage of this bill.  The extension and expansion of the homebuyer tax credit will help stabilize housing markets and the nation’s economy, according to NAR.

Read up on the credit at VARbuzz, and don’t forget to download the new flyer and tell your clients about the homebuyer tax credit extension. You can even send them to this story on the Virginia Homeowners Alliance Web site that explains how the new $6,500 “move-up buyer” credit could benefit them.

The Unemployment Insurance bill including the homebuyer tax credit extension and expansion has passed the House by a vote of 403-12 after passing the Senate last night 98-0. The new provisions take effect as soon as President Obama signs the bill, which we expect will be before the weekend. Right click this link and select “Save target as…” to download a chart explaining the difference between this credit and the one set to expire on November 30.

The bill would extend the present $8,000 tax credit for first-time home buyers through April 30, 2010. Current homeowners are eligible for a $6,500 tax credit through April 30, provided they have lived in the home they are selling, or have sold, as principal residence for five consecutive years in the past eight years. If potential home buyers have a binding contract on or before April 30, they will have until July 1 to close the transaction.

Income limits for eligible home buyers are expanded to $125,000 for single buyers and $225,000 for couples. The purchase price of the home cannot exceed $800,000. To help guard against fraud, buyers are required to attach documentation of purchase to their tax return.

Here’s a Q&A from NAR about the new credit:

Q.  Existing homeowner credit:  Must the new house cost more than the old house?  
A.  No.   Thus, for example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6500 credit. 

Q.  I am an existing homeowner.  On October 25, 2009, I signed a contract to purchase a new home.  I have lived in my current  home for more than 5 consecutive years and am within the new income limits.  I will go to settlement on November 20.  If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?
A.  Yes.  The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed).   There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement. 

Q.  I am a first-time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009.  I will be covered, however, by the new income limits.  If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?  
A.  Yes.  The new income limitations go into effect as soon as the President has signed the bill. The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date.  So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you’re within the phase-out range).

Q.  I am an eligible existing homeowner.  I have a fair amount of equity in my home.  I have found a home with a non-negotiable price of $825,000.  Will I be able to use any of the $6500 tax credit?
A.  No.  The $800,000 cap on the cost of the purchased home is firm at $800,000.  Any amount above $800,000 makes the home ineligible for any portion of the credit.  The $800,000 is an absolute ceiling. 

Q. I owned my home for 10 years, but sold it two years ago year and have been renting since.  If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?
A.  Yes.  Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit.  For example, Say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be  eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is "consecutive." As long as he lived in that house for 5 years straight, what he did since 3 years doesn’t impact eligibility.

Q.  I am an eligible first-time homebuyer.  I entered into a contract to purchase on November 1, 2009.  Do I have to go to closing before December 1?  How does the extension date affect me?
A.  You do not have to close before December 1.  Once the legislation has been signed, it will be as if the Nov 30 date had never existed.  Therefore, so long as the contract settles before April 30 (or July 1, worst case), the purchaser will be eligible for the credit.

UPDATE: The House passes the bill. Obama expected to sign it before the weekend.

According to NAR, yesterday the Senate voted 98-0 to extend and expand the home buyer tax credit. WaPo article on the vote.

The House is expected to accept the Senate version as early as today and, from there, the bill will go on to the White House, and the President has indicated he will sign it.

Here are the bill’s provisions as they relate to the home buyers credit:

Credit available for purchases before May 1, 2010. Prospective purchasers with binding contracts in place as of April 30, 2010 will be allowed an additional 60 days to complete the transaction.

• Credit remains at $8000 for first-time purchasers. No change to definition of first-time purchaser.
• New $6500 tax credit for repeat buyers who purchase between December 1, 2009 and May 1, 2010. Repeat buyers must have lived in their homes consecutively for 5 of the previous 8 years.
• Income limits are expanded to $125,000 on a single return and $225,000 on a joint return. Current law $20,000 phase-out retained.
• New anti-fraud limitations are imposed.

That new agency being the Consumer Financial Protection Agency (CFPA), the creation of which passed the House Financial Services Committee just a few weeks ago.

According to Robert Freedman at NAR, Realtors^® need to take note. Over at the Speaking of Real Estate blog, he writes (in a piece titled, rather clearly, "New Financial Regulator Would Impact You") that, while the new agency will focus only on financial services companies…

CFPA could still touch the real estate transaction in several ways, though. Assuming the bill passes in something close to its current form, the Real Estate Settlement Preocedures Act (RESPA), which today is overseen by HUD, would be placed under CFPA.

And

Aspects of the Home Mortgage Disclosure Act (HMDA), which real estate professionals know mostly for its role in providing data on mortgage lending, would also fall to CFPA.

Of course, the CFPA is still at least a few steps away from being born, but it pays to keep up with these things, lest you end up on the wrong side of the law. Or the regs. Or both.

Freedman includes a short video interview with NAR financial services analyst Tony Hutchinson. Next time you have a moment, check it out.

Yesterday’s election left its mark on the landscape of Virginia’s Capitol Square. With local association endorsements and VAR member votes, RPAC of Virginia-endorsed candidates Governor-elect Bob McDonnell and Lt. Governor Bill Bolling were both victorious last night. And 77 of the 88 RPAC-endorsed House of Delegates candidates will take their seats in the 2010 General Assembly.

RPAC endorsements consistent with Virginia voters
In 2009, the RPAC of Virginia Trustees, working with NAR’s Electoral Services Program, allocated over $400,000 in various expenditures for candidates and their campaigns. These include:

• direct cash contributions to candidates and their campaigns,
• homeowner-targeted postcards in 9 districts, and
• Realtor®-targeted register-to-vote reminders, statewide candidate and House of Delegates candidate postcards in 48 districts.

Through these efforts, RPAC of Virginia reached tens of thousands of registered Virginia voters, promoting the candidates who have supported homeowner and Realtor® issues across Virginia. It is significant to note that most of the RPAC of Virginia-endorsed candidates (87%) were elected yesterday. Election Day 2009 proved once again that RPAC of Virginia supports candidates whose positions reflect with the public’s priorities.

A reason for optimism
Despite some different faces appearing on Capitol Hill next year, Realtors® are well positioned as the General Assembly approaches. We look forward to the start of what promises to be an exciting 2010 session.

From NAR:

Although the Senate was not able to reach a procedural agreement to schedule a vote on the Unemployment Insurance extension, the Dodd-Lieberman-Isakson Amendment to extend and expand the Tax Credit is contained in the bill.

The Senate is expected to vote, Monday evening, for a "Motion to Invoke Cloture" if  60 Senators vote yes on the cloture motion, the Senate will then be able to schedule a vote on the bill that contains the Dodd-Lieberman-Isakson Amendment.

Once the Senate acts, the tax credit must still go to the House of Representatives for action.

NAR is asking Realtors to continue pressing their legislators to approve the bill. Right now, a call to Senators Webb (202) 224-4024 and Warner (202) 224-2023 asking them “To vote yes on the motion to invoke cloture on the Unemployment Insurance Extension” will keep the legislative process moving.

It’s been out for a week, but VAR’s third quarter home sales report is still getting press attention. Here’s a full list of stories we’ve spotted:

• The Gazette-Virginian: Prices down, transactions up
• Richmond Times Dispatch: sales up, prices down
• Lynchburg News & Advance: drops in sales, prices leveling off
• WHSV TV Staunton: housing sales show improvement
• Lynchburg News & Advance: home sales strengthen over summer
• Richmond Times Dispatch: prices down 11.7%, sales up in Richmond area
• InsideNOVA.com: prices move up in Prince William County

You can download the home sales report, listen to a podcast of a conference call held with the media about the report, and view the raw sales data at www.VARealtor.com/HomeSales.

I occasionally go through the spam folder — where all the junk comments to this blog go to die. Most are what you expect: ads for this or that, couched as real comments.

Then there’s this. I have no idea what it’s supposed to do — the submitter didn’t even use a valid URL (which is sometimes the entire purpose of a spam comment):

If there were a flier sprog quest of disaster vigilance, Cupertino’s Fairgrove neighborhood would be pictured throughout California.

cheers,
______________
Copypoick

And with that, happy Friday.

NAR tells us that the fight to extend the homebuyer’s tax credit still has a long way to go.

Senate leaders of both parties and key Senate Finance Committee members and staff, and tax credit sponsors Dodd-Lieberman-Isakson have agreed on extending and expanding the housing tax credit.

However, there is no agreement on how to attach this tax credit to the pending Unemployment Insurance bill, or whether to offer the tax credit agreement on another bill, or whether to bring the agreement to the Senate floor and vote upon it as a separate, stand alone bill.

And after Senate action, the tax credit must go to the House of Representatives for action.

NAR is urging Realtors to continue contacting their Senators about extending and expanding the tax credit. Click here to contact your Senators today.

UPDATED: The bill must still be voted upon by the full Senate, be reconciled with the House and be signed by the President. More details here.

NAR’s lobbying efforts succeed yet again. Today US Senators passed a measure extending the first time homebuyer’s tax credit. Additionally, a reduced credit of $6500 is available to move-up buyers who have lived in their current homes for five years or more. The credit applies to those who sign sales agreements by April 30, 2010.