Wednesday, August 6, 2008

Another housing stimulus update

I just looked at my last posting and realized that we need another update to the update. The housing stimulus package passed! Here are the two biggest changes that affect first-time homebuyers the most:

  1. Tax credit of up to $7,500. It's not just a deduction, you actually get the money! Here's the fine print: It's only for first-time homebuyers or people who haven't owned a home in the last 3 years. You must purchase the home between April 9, 2008 and July 1, 2009. Individuals who earn more than $75,000 per year may not qualify for the full amount. You don't actually get to keep the money. It's an interest-free loan that must be paid back within 15 years.
  2. Down payment requirements. The down payment required for FHA loans will increase from 3% to 3.5% as of October 1. Also, you are no longer able to receive down payment assistance from the seller. Many builders of new homes are offering down payment assistance now, so if you're thinking about purchasing a new home or if you are planning to negotiate for the seller to pay your down payment on an existing home, you better act quickly!

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